With the U.K. gearing up to leave the European Union, the country got a little bit of stability when Bank of England Governor Mark Carney signaled he would stay on as head of the Central Bank longer than planned.
According to a report in The Wall Street Journal, citing testimony Carney made to U.K. lawmakers, the central bank head said he discussed extending his job with Treasury Chief Philip Hammond and that a final decision on that front will be made public shortly. Carney was slated to leave the Bank of England next year. He told lawmakers that a "measure of continuity" could help the Brexit process, which is already uncertain as London and Brussels continue talks and there is infighting within Parliament.
“I am willing to do whatever else I can in order to promote both a smooth Brexit and an effective transition at the Bank of England,” Carney said in the testimony, reported the WSJ. His term is up at the end of June after six years in the role. Carney had initially planned to stay for five years, but took on an extra year at the end of 2016 to steer the economy through the exit from the European Union.
David Owen, chief European economist at Jefferies in London, told the WSJ that it would be good if Carney stayed on. “The perception of international investors and investors here in the U.K. is that we have continuity. In the event of no deal, there will be a grown-up controlling monetary policy,” he said. The paper noted that Carney hasn't said how long he would stay.
The Treasury Department, which is in charge of the appointments of Bank of England officials, declined to comment to Reuters. The paper noted that extending Carney's term would also give the Treasury time to find his replacement.