After the UK voted to come out of the European Union, the UK government has been keen on keeping the Bank of England’s governor Mark Carney in his role up to January 2020-end. This means Carney should be overlooking the Brexit or Britain’s exit.
Britain is scheduled to divorce from Europe on March 29, 2019, and the country is in the process of working out a deal for maintaining its present trading system in place until 2020-end. However, if the deal is not reached, the UK economy and financial markets could considerably turn into chaos.
The new extension confirmed the speculations, which were mounting in recent weeks, that the government will ask Carney to stay at the central bank. The government was struggling to find a suitable successor to Carney and the finance ministry was keen on an extension.
Under Carney’s shadow, the bank had lifted interest rates twice with the recent hike being in August. Experts believe that Carney’s longer stay could give more time for the government to accept in terms of the country’s exit from the EU.
The Chancellor of the Exchequer, Philip Hammond, told the New York Times that Carney’s tenure extension would provide vital stability for the UK’s economy. Hammond also said the bank’s deputy governor Jon Cunliffe will serve a second five-year term until October 2023.
Meanwhile, the policymakers of the central bank are due for a monetary policy meeting that is scheduled in two days. In August, the interest rates have been lifted by the bank to 0.75% with regard to the 2.4% inflation cap. Shortly after the referendum, the central bank lowered its benchmark interest rate to 0.25.
Carney was appointed in 2013 to lead the central bank and he was planning to leave in 2018. Following the Brexit vote, he changed his decision and agreed to extend the term until June 2019.