BOE's Next Governor Shouldn't Be From Overseas, Sentance Says

(Bloomberg) -- Former Bank of England policy maker Andrew Sentance said the U.K. shouldn’t look overseas for the institution’s next governor, criticizing incumbent Mark Carney for not knowing enough about Britain.

Sentance, a member of the Monetary Policy Committee from 2006 to 2011, told the Press Association that Carney’s “lack of confidence with raising interest rates has been due to the fact he’s not familiar with the U.K. economy.” Sentance has long pushed for higher interest rates, and spent the last year of his time on the MPC voting unsuccessfully to tighten monetary policy.

“I don’t think having people who aren’t familiar with the U.K. economy jetted in would be a good thing,” he said in the interview.

Chancellor of the Exchequer Philip Hammond has indicated he’s willing to look abroad for a governor to take over when Carney, a Canadian, leaves next summer. Among the potential foreign candidates is Raghuram Rajan, the University of Chicago professor who previously led the Reserve Bank of India.

Within the U.K., Financial Conduct Authority chief Andrew Bailey is seen as the favorite, while BOE deputy governors Ben Broadbent and Dave Ramsden have also been linked to the role.

Sentance, who’s now a senior economic adviser at PwC, said Carney’s communication to the markets has been “very poor.” He added that he “missed several chances” to raise rates and now risks leaving the economy facing a “stagflation scenario.”

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