Wednesday 5 September 2018 7:56 am

DEBATE: Would it be beneficial for the UK economy if Mark Carney stayed on as Bank of England governor?

Follow Katrina Usita

Would it be beneficial for the UK economy if Mark Carney stayed on as Bank of England governor?

Katrina Usita, an economist at OMFIF, says YES.

Uncertainty is the UK economy’s greatest problem. Mark Carney’s willingness to extend his term as Bank of England governor for another year assuages some of that, at least in relation to monetary policy.

Postponing Carney’s departure allows the central bank to focus on managing financial markets’ response to Brexit, rather than being distracted by a leadership transition. Carney proved his ability to manage turbulence in the aftermath of the June 2016 referendum, clearly communicating what steps the Bank would take to cushion the economic impact. The Bank cut interest rates within the next month, calming volatility, preventing capital flight, and rebuilding confidence in the pound.

The threats posed by a no-deal Brexit are same as the ones created by the Leave vote. Whether or not a proper agreement is achieved before 29 March 2019, the central bank needs to be able to respond to the UK’s new economic reality – whatever that might end up being.

Read more: Mark Carney says he is willing to stay on as Bank of England governor

Alex Deane, a Conservative commentator, says NO.

Mark Carney has said he would be “willing” to stay on at the helm of the Bank of England. Good for him, but not so good for the country.

The high priest of Project Fear continues to ladle out the doom from his bottomless well of economic despair. He is apparently blind to the economic success on show all around him – but there are none so blind as those who will not see.

For other roles, this might not matter. Titans of industry indulged in end-of-the-world millenarianism about Brexit without seemingly harming their reputations – and certainly without taming their egos in the slightest.

But the Bank of England is different. Despite the sustained best efforts of the governor, its views continue to matter – and, to an extent, can be self-fulfilling. When someone is so closely associated with predictions that are debunked, it is for the best that they depart. Even George Osborne, once chancellor of the Exchequer and now editor of London’s second best freesheet, understood this – why doesn’t Carney?


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