Osborne’s hire could herald a Bank shake up

Ben Southwood
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MARK CARNEY’S succession to the Bank of England throne will be the first step in a revolution at the top of the central bank, analysts forecast yesterday.

Deputy governor for monetary policy Charlie Bean will leave after a year, chancellor George Osborne confirmed in his announcement to parliament. And Paul Tucker, deputy governor for financial stability and formerly the frontrunner to succeed Sir Mervyn King as governor, is only contracted to continue in his job until February 2014.

“This appointment opens up an interesting question on the two deputy governors,” said Philip Shaw at Investec. “Even with a one year extension, Charlie Bean is set to retire in June 2014.

“It is not clear that having missed the governor’s job, whether Paul Tucker will remain in his post beyond February 2014. Yesterday’s appointment could well usher in a period of significant upheaval at the Bank of England.”

Robert Wood at Berenberg Bank said that Carney’s first priority might be to convince Tucker to stay longer with the Bank. “If both deputy governors were to leave shortly into Mark Carney’s tenure, it would mark a huge loss of experience at the top of the Bank,” he said.

But before any of this, Carney will face a grilling on monetary and financial policy from Andrew Tyrie’s Treasury Select Committee, on his own request.

MPs are likely to quiz the Canadian on his plans for rates policy, and his views on the quantitative easing programme.