Navigating Brexit

CARNEY EXTENDS HIS STAY AT BANK OF ENGLAND UNTIL 2019 TO OVERSEE EUROPEAN EXIT.

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• Bank of England Governor Mark Carney said on Monday he will stay in his job for an extra year until the end of June 2019, to help smooth Britain’s departure from the European Union, but he will depart two years short of a full term.

Carney, who has come under heavy criticism from pro- Brexit politicians for warning before June’s referendum of the economic risks of voting to leave the EU, had the option to stay at the Bank until 2021.

But the Canadian decided against serving the full eight years available to him.

“I would be honoured to extend my time of service as Governor for an additional year to the end of June, 2019,” he said in a letter to finance minister Philip Hammond, which was published by the Bank.

“By taking my term in office beyond the expected period of the Article 50 process ( for Britain to leave the EU), this should help contribute to securing an orderly transition to the U. K.’s new relationship with Europe,” he said.

Prime Minister Theresa May, who has tried to dampen the pressure on the central bank chief, welcomed his announcement. Her spokeswoman said it would provide “continuity and stability” while Britain negotiates its EU exit.

Sterling, whic h has sl umped around 20 per cent since the Brexit vote on worries about Britain’s economic prospects, soared on Monday to US$1.2240 on the news of Carney’s extension.

Elizabeth Martins, an economist with HSBC, said the announcement of a oneyear extension appeared to be a “bit of a half- way house” that would help Britain get past the potential volatility of the Brexit negotiations.

“I guess t hat markets would have liked to see a 2021 extension, and expected it given indications in the media. But this will go down better than an earlier departure,” she said.

But Conservative l awmaker and outspoken Carney critic Jacob Rees- Mogg told Reuters: “I think the uncertainty was bad, but I still think he ought to have gone because of his bias over Brexit.”

Carney had previously said he would announce by the end of this year whether he would stick to his original departure date of mid2018, when Britain is likely be deep in the process of extricating itself from the EU.

Most economists in a Reuters poll expected Carney to agree to stay on beyond 2018.

The 51- year- old is the father of four school- age children and he said last week his decision would be based on personal rather than political considerations.