Mark Carney, the governor of the Bank of England, has said he will stay in his role until 2019 to help secure an "orderly transition to the UK's new relationship with Europe".
Carney, who was appointed to the role in 2012, was appointed for eight years, but made it clear he only intended to serve five due to "personal, family considerations". Tonight he said he will extend his time in the role for a year until June 2019, which will cover the period of negotiations with the EU.
Theresa May has said she will trigger article 50 in March 2017, which will kick off two years of formal talks.
The governor confirmed the news in a letter to the chancellor published this evening.
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.
It is an honour and a privilege to serve in this important role. I deeply appreciate your support, that of the Prime Minister, and that of colleagues at the Bank, and I look forward to continuing to promote the good of the people of the United Kingdom during this crucial time for the country.
In his reply, the chancellor Philip Hammond said:
I am very pleased to hear that you intend to continue as Governor of the Bank of England until the end of June 2019. This will enable you to continue your highly effective leadership of the Bank through a critical period for the British economy as we negotiate our exit from the European Union.
Very pleased that Mark Carney will stay as Governor to 2019 – extending his highly effective leadership of the Bank https://t.co/aNWGnUtn3y
— Philip Hammond (@PhilipHammondUK) October 31, 2016
The announcement follows days of speculation as to whether the governor would stay in his role, after reports circulated that he was likely to step down sooner than planned.
Chris Chapman, a London-based trader at Manulife Asset Management, told Bloomberg the City should welcome his decision:
Carney is a respected central banker and overall I’d say that him staying with the BOE until 2019 would be seen as a positive for the country, but again, near term there are so many other factors weighing on the pound.
But Toscafund's chief economist Savvas Savouri was quick to denounce his choice.
"I'm amazed by the deification of this man," he said. "Every time Carney opened his mouth in the days and weeks after the referendum, the pound weakened."
Sterling has rallied a little at the news, up slightly against the euro to €1.115 and the dollar at $1.224. Earlier today there was speculation that Carney's actions had caused a spike in the currency at around 4pm.
This afternoon Carney went to Downing Street for a scheduled visit with Theresa May, where he also met the chancellor.
Before the meeting her spokesperson publicly backed Carney to remain in the role, saying he was "absolutely" the best man for the job.
"The PM would certainly be supportive [for him to stay]," she said.
The news led to the pound regaining some of its losses – it was up to $1.2171 against the dollar and €1.1118 against the euro.