Under fire, Carney to stay extra year at Bank of England

Mon Oct 31, 2016 3:23pm EDT
 
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By William James and William Schomberg

LONDON (Reuters) - Bank of England Governor Mark Carney said on Monday he will stay in his job for an extra year until the end of June 2019 to help smooth Britain's departure from the European Union, but he will depart two years short of a full term.

Carney, who has come under heavy criticism from pro-Brexit politicians for warning before June's referendum of the economic risks of voting to leave the EU, had the option to stay at the Bank until 2021.

But the Canadian decided against serving the full eight years available to him.

"I would be honoured to extend my time of service as Governor for an additional year to the end of June 2019," he said in a letter to finance minister Philip Hammond, which was published by the Bank.

"By taking my term in office beyond the expected period of the Article 50 process (for Britain to leave the EU), this should help contribute to securing an orderly transition to the UK's new relationship with Europe," he said.

Prime Minister Theresa May, who has tried to dampen the pressure on the central bank chief, welcomed his announcement. Her spokeswoman said it would provide "continuity and stability" while Britain negotiates its EU exit.

Sterling, which has slumped around 20 percent since the Brexit vote on worries about Britain's economic prospects, hit its highest level on Monday at $1.2240 on the news of Carney's extension. [GBP/]

Elizabeth Martins, an economist with HSBC, said the announcement of a one-year extension appeared to be a "bit of a half-way house" that would help Britain get past the potential volatility of the Brexit negotiations.   Continued...

 
Bank of England Governor Mark Carney speaks at the Future Forum in Birmingham Town Hall, in Britain, October 14, 2016. REUTERS/Chris Radburn/Pool