Carney ‘should be replaced by someone British’

Canadian doesn’t understand UK’s economy, says former Bank expert

MARK Carney has been savaged by a former Bank of England rate- setter, who called for the Governor to be replaced by a Briton.

Andrew Sentance, senior economic adviser at PricewaterhouseCoopers, who has served on the Bank’s monetary policy committee, said Canadian Mr Carney’s ‘lack of confidence with raising interest rates has been due to the fact he’s not familiar with the UK economy’.

He warned that the Treasury should not look overseas again as it begins to compile a shortlist of candidates for the Governor role, which Mr Carney will leave in June 2019. ‘I don’t think having people who aren’t familiar with the UK economy jetted in would be a good thing,’ Mr Sentance added.

The Treasury is expected to choose its list of candidates this summer, with a final decision set to be made around November.

Mr Carney’s appointment in June 2013 saw him become the first foreign Governor at the Old Lady of Threadneedle Street, replacing Sir Mervyn King at the helm.

A Treasury source said the recruitment process for his successor will be ‘open and fair’, adding that it will appoint the next Governor ‘purely on merit’.

Mr Sentance said Mr Carney’s tenure had been marred by a raft of missed opportunities to increase rates above 0.5 per cent. They have languished at emergency lows for more than ten years.

His comments came after the Bank backed away from raising rates once again last month, following a slowdown in growth.

Mr Sentance said Mr Carney seemed ‘ very reluctant’ to bring rates back to more normal levels, with just one rise last November, reversing a cut to 0.25 per cent made after the Brexit vote.

He added that the monetary policy committee had ‘missed several chances’ to raise rates since the start of 2014, and now risked leaving the economy facing a ‘stagflation scenario’.

‘We’re in danger of being in a position where high inflation and low growth are feeding off each other,’ he cautioned.

He also claimed Mr Carney’s attempts at so-called forward guidance on rates had backfired, with the Governor earning himself the nickname ‘unreliable boyfriend’ after bracing borrowers and financial markets for hikes that did not come to pass.

Last month Mr Carney claimed the Bank could even cut interest rates again in the event of a ‘disorderly’ Brexit.

‘His communication with the markets has been very poor,’ said Mr Sentence, who is backing internal favourite Andrew Bailey – the head of the Financial Conduct Authority and former right-hand man to Sir Mervyn – to be the next Governor.

Other potential candidates include Deputy Governors Ben Broadbent and Sir Dave Ramsden, and Andy Haldane, the Bank’s chief economist.

Mr Sentance added that he would ‘like to see a woman heading the Bank’, but admitted that a lack of internal candidates being brought through the ranks made this unlikely in the short-term.

Throwing his own hat into the ring, he said he would ‘be delighted’ if someone put him forward. ‘I think I could do a very good job, but don’t think I’m flavour of the month,’ he added.

‘Communication has been poor’