Blow to Chancellor as Carney says: I’m leaving after Brexit
BANK of England Governor Mark Carney delivered a blow to Philip Hammond yesterday by announcing he will quit two years before the end of his maximum term.
Mr Carney told Theresa May that he will leave in June 2019, three months after the UK is expected to have left the European Union.
But the decision was seen as a blow to Mr Hammond, who is said to share Mr Carney’s downbeat assessment of the economic impact of Brexit. Only last month, the Chancellor called publicly for him to stay on until 2021.
The decision does extend Mr Carney’s initial five-year term, which was due to end in 2018 – but it disappointed critics who wanted him to resign immediately over his controversial role in Project Fear.
Mr Carney has faced fierce criticism over his role in promoting Project Fear during the EU referendum, and his analysis of Britain’s prospects outside the EU following the June 23 vote. He has also clashed with Mrs May over his controversial policy on printing money, and his fixation with ultra-low interest rates, which she warned last month had hurt savers.
Leading figures, including former Tory Chancellor Lord Lawson, have called for him to resign. But in a letter to Mr Hammond, Mr Carney said he would stay on in his £879,000-a-year role until the summer of 2019, by which time Britain is expected to have left the EU.
In line with his gloomy view of Brexit, Mr Carney, 51, is said to have told friends that mid-2018, when he was due to go, ‘could be the darkest days for the UK’.
Bank sources yesterday insisted the former Goldman Sachs banker had never intended to stay beyond 2018 when George Osborne recruited him.
He has four daughters and is said to be keen to return to Canada to pursue a political career. Canadian elections are scheduled for late 2019.
In his letter to Mr Hammond, he said: ‘Since then, my personal circumstances have not changed but other circumstances clearly have, most notably the UK’s decision to leave the European Union. Recognising the importance to the country of continuity during the UK’s Article 50 negotiations… I would be honoured to extend my time of service as Governor for an additional year to the end of June 2019.
‘By taking my term in office beyond the expected period of the Article 50 process, this should help contribute to securing an orderly transition to the UK’s new relationship with Europe.’
The announcement followed an hour-long meeting with Mrs May in Downing Street.
The Prime Minister welcomed Mr Carney’s decision to stay on ‘beyond his initial five-year term’, although she is not thought to have tried to persuade him to stay longer.
A spokesman for Mrs May said: ‘This is good news for the UK. It will provide continuity and sta- bility at the Bank of England as we negotiate our exit from the European Union and look to take advantage of the opportunities that Brexit will present.’
Tory critics of Mr Carney repeated their view that he should go now – and warned he will damage Britain’s prospects if he continues his doom-laden warnings about Brexit.
Steve Baker, a member of the Commons Treasury committee, said Mr Carney’s negative view of Brexit made it almost impossible for him to carry out his role, adding: ‘He is a big player in the economy and his views on Brexit make him a potentially destabilising force.
‘We need a governor who is committed to promoting our success rather than talking the economy down.’
Fellow Tory Jacob Rees-Mogg added: ‘He lost his reputation for independence during the Brexit campaign and I still think he should go.
‘I think he now has to recognise that sentiment is very important to the markets – it is highly unusual for a central bank governor to talk down the economy in the way he has and it must stop.’
Andrew Tyrie, chairman of the Commons Treasury committee, said Mr Carney would be summoned to give evidence on why he was leaving early. The pound rose last night as investors welcomed an end to recent speculation over Mr Carney’s future.
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