Bank of England governor Mark Carney says he will step down in June 2019. It means he will serve one additional year beyond the five-year term he committed to when he took the post, but will still be two years short of the usual eight years governors serve.
The Canadian born banker said the move “recognized the importance to the country of continuity” during Brexit negotiations.
The announcement comes after Prime Minister Theresa May said she was “supportive” of him continuing.
“This should help contribute to securing an orderly transition to the UK’s new relationship with Europe,” Mr Carney added.
Chancellor Philip Hammond said he welcomed Mr Carney’s decision to stay an additional year. He said it would enable Mr Carney to continue his “highly effective leadership of the Bank through a critical period for the British economy as we negotiate our exit from the European Union”.
Mr Carney had originally said he would announce his decision on whether he planned to continue until 2021 by the end of the year. But with conflicting newspaper reports over how long he would stay on in the role, pressure was mounting on the governor to make a decision
Earlier on Monday, Carney had an almost two-hour meeting with Mrs May, after which a spokeswoman said the prime minister would be “supportive of him going on beyond his five years” and “absolutely” believed he was “the right man for the job”.
Mr Carney told a House of Lords committee last week that should he decide to go before 2021, it would be an “entirely personal decision”. Mr. Carney has a wife and four daughters, who moved to London with him in 2013.
The Financial Times had earlier suggested Mr Carney wanted to stay on to defend the Bank of England’s independence against attacks from pro-Brexit campaigners. They have argued that the Bank produced deliberately gloomy economic forecasts to support the Remain campaign.
Conservative MEP Daniel Hannan, a prominent pro-Brexit campaigner, had suggested Carney should leave his post. “If he does stay, it’s got to be on basis that he’s not the rock star banker who presumes to tell Scotland whether to stay and Britain which way to vote, but rather sticks narrowly to his brief,” Mr Hannan told BBC Radio 4’s Today program.
However, Dame Kate Barker, a member of the Bank’s Monetary Policy Committee between 2001 and 2010, told BBC 5 live that criticism of Mr Carney was not justified.
“I certainly don’t think he’s been particularly political,” she said. “The criticism, which is mostly around the Bank saying what it thought might happen if we come out of the EU, is really overstated. The Bank had to say what it thought might happen”.