Mark Carney, Governor of the Bank of England, has announced that he intends to stay in his position until June 2019, a year later than he had committed to upon being appointed in November 2012. The average length of the governor’s tenure has until Carney been eight years, but at the time of accepting the role, Carney emphasised his desire to have a shorter duration due to familial consideration.
In a letter to Philip Hammond, the Chancellor of the Exchequer, Carney today wrote: “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 contribute to securing an orderly transition to the UK’s new relationship with Europe.”
Indeed, the terms of Article 50, which governs a country’s exiting of the European Union, specifies that once triggered, the exiting country must leave within a two-year timeframe. Though not having been triggered immediately after the UK referendum, despite calls from party leaders such as Jeremy Corbyn and Nigel Farage, Theresa May PM has indicated that she expects to trigger Article 50 in March 2017. This will entail that the formal exiting from the European Union will take place by March 2019 – three months before Carney’s now-planned departure.
The news of Carney’s intention to remain was welcomed by the government and the markets. Since the announcement, the pound sterling increased slightly in value against the dollar and Euro, and Mr Hammond was quick to reply: “I am very pleased to hear that you intend to continue as Governor of the Bank of England until the end of June 2019. This will enable you to continue your highly effective leadership of the Bank through a critical period for the British economy as we negotiate our exit from the European Union.”
With much of the financial short-term damage that has occurred since June, Carney’s forward guidance reduces the environment of uncertainty in Britain as well as a pair of competent hands in managing the future of the economy as it undergoes major change.
June 2019 will be a point between Brexit and the expected date of the next general election, March 2020. In leaving at the time he now plans, Carney offers experience to an event with extraordinarily high levels of speculation amidst a chain of major oncoming events.
While Carney had said earlier in 2016 that toward the end of the year he would announce his decision as to whether his original contract would be extended from 2018 to 2021, it was not made clear whether a point between the two dates could be his extension instead.
A spokeswoman for the prime minister added upon news of Carney’s decision that: “The prime minister welcomes the governor’s decision to stay on beyond his initial five-year term.
This is good news for the UK. It will provide continuity and stability 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.”