Carney's Chance to Quell Speculation on Future Comes in Grilling
(Bloomberg) -- Mark Carney will have his chance to put speculation about his future as Bank of England governor to rest when he faces lawmakers on Tuesday.
The U.K. parliament’s Treasury Committee’s session is billed as seeking evidence on BOE policy and its most recent economic forecasts, but it’s Carney’s own future that is currently dominating the headlines. The Canadian is in talks about staying in the role beyond his planned departure date of June next year, according to a report by the BBC on Monday.
A government spokesman on Monday played down the prospect, saying Carney still plans to leave his role in 2019, and the BOE and the Treasury declined to comment.
Without clarity from Carney, that seems unlikely to quell the chatter. Speculation that he needs to stay on to ensure stability after the U.K.’s March exit from the European Union, or that the Treasury is struggling to find a replacement while it focuses on Brexit negotiations, has ramped up even as Carney himself repeatedly denied his plans have changed.
The governor will face the U.K. parliament’s Treasury Committee at 1:15 p.m. in London, alongside Chief Economist Andy Haldane and external policy maker Silvana Tenreyro.
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They’ll likely discuss their Aug. 2 decision to raise interest rates for the second time in a year and new forecasts, which predict growth of just 1.4 percent this year. Inflation, the U.K.’s weak productivity and sluggish pay growth are also likely to feature.
Carney’s tenure has been unorthodox from the start. He was appointed to the role in late 2012 after previously saying he wasn’t interested in the job, and initially said he would serve just five years of what is usually an eight-year term. Following Britain’s 2016 Brexit vote, he agreed to remain in place an additional year to the end of June 2019, to help steer the BOE until the government had completed negotiations.
The lawmaker committee, which oversees the work of both the Treasury and BOE, has never shied away from using its regular sessions to ask tough questions of Carney, sometimes leading to fiery exchanges.
Asked about controversy surrounding his previous extension by lawmakers in 2016, he justified his decision as being taken “out of a sense of responsibility.” He also said that he wished to limit how much longer he would stay due to it requiring him to be separated from his family in Canada.
Former BOE policy maker Adam Posen, president at the Peterson Institute for International Economics, played down the need for any extension.
“Governor Carney is very distinguished. I understand it would be nice to have continuity, but any of the other reasonable candidates would be just as good,” he said in a Bloomberg Television interview. “Brexit presents a unique challenge for the U.K. economy and the bank. It’s better if it’s not about one individual negotiating their position, it’s about the bank or the committee’s position.”
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