Mark Carney has ended weeks of speculation about his future by agreeing to stay on as governor of the Bank of England until Brexit negotiations with the EU have ended in 2019.
Despite being urged by the prime minister, Theresa May, and the chancellor, Philip Hammond, to serve a full eight-year term at Threadneedle Street, until 2021, Carney said he would only agree to remain in place for an extra year. He started in the job in July 2013.
The governor said in a letter to Hammond that he had intended to leave the Bank for personal reasons after five years, but the altered landscape for the UK following the vote in June to leave the EU had caused him to change his mind.
“Since then, my personal circumstances have not changed, but other circumstances clearly have, most notably the UK’s decision to leave the European Union,” he wrote.
“Recognising the importance to the country of continuity during the UK’s article 50 negotiations, and notwithstanding those personal circumstances, 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 help contribute to securing an orderly transition to the UK’s new relationship with Europe.”
His announcement followed a meeting with May in which the prime minister gave the governor her full backing for his handling of interest rates and called on him to stay to help steer the UK economy through the post-Brexit vote period.
The public show of support for Carney from the government’s two leading figures reflected concerns that news of his early departure would put further downward pressure on an already weak pound. Sterling fell by 6% in October, during which it was the weakest of 150 global currencies tracked by Bloomberg.