Issue of the week: Carney extends his term
The Bank governor will stay on to complete negotiations for Brexit, but has agreed to the shortest possible extension
“A lot of things have been turned upside down since the UK voted to leave the EU,” said the Financial Times. “For a while it looked as if the independence of the Bank of England might be one of them.” Happily, having endured “a volley of attacks” from the right of the Conservative Party, the Old Lady’s governor, Mark Carney, has “asserted his authority” by setting a date for his departure. He’ll leave in 2019 – a compromise between the minimum fiveyear term he originally committed to, and the eight-year maximum. Carney’s statement, welcomed by the Government and the markets, will end “destabilising speculation in the short term”. But the UK “may still be in economic turmoil” when the date arrives. “It would be prudent to start making some preparations for the eventual handover to his successor.”
Carney’s record on economic forecasting is hardly unblemished, said Alistair Osborne in The Times. But even he “should be able to forward-guide around his own job”. Now, at least, “there’s some overdue clarity to the whole will-he, won’t-he saga”. It always seemed ridiculous that he should “scoot off” in June 2018, just nine months before “yer actual Brexit” – it would have been better for him to have gone now. Still, the idea that “he was being hounded out of office” by a coalition of powerless Tories (Lords Lawson and Hague, Michael Gove, etc) is absurd. “An independent governor shouldn’t feel so thin-skinned that he threatens to flounce out at the first sign of criticism.” Having picked a public fight with the PM, Theresa May, when she rightly criticised the “bad side effects of QE”, he put her in a corner “where she had little choice but to back him, or trigger a sterling rout”.
No one should be “above criticism” and “nobody is irreplaceable”, said Allister Heath in The Daily Telegraph. But Britain is “undergoing the greatest policy reset in 60 years”, and losing Carney would have “been interpreted very badly overseas”. It would also have felt like a “witch-hunt against a Remainer”. Some may feel that Carney’s pre-referendum stance was “misjudged”, but he has since “redeemed himself”. “When Eurosceptics accuse Carney of dabbling in politics, they have a point,” said Janan Ganesh in the FT. He stepped into the “eerie void” after the vote and stabilised the nation; he spent his summer “fighting a fire lit by others”. Carney can look after himself, but the incident is a warning of “things to come”. He is “Patient Zero of Eurosceptic vilification”; the first victim of “a winner’s justice” that will target anyone else who quibbles with “a brute departure from the single market”. The Chancellor, Philip Hammond, should take note.