Bank of England Governor Mark Carney faces a “complicated” few years plotting a course between financial stability and criticism from politicians until he steps down in 2019, according to HSBC.
Carney announced on Monday he will stay in his role until the end of June 2019, ending weeks of speculation about his future with the bank and surprising analysts that had expected him to pick between 2018 and 2021 as end-dates for his term.
“Mr Carney’s job remains a complicated one,” HSBC economist Elizabeth Martins wrote in a note to clients.
“The Bank has been criticised by politicians for the imbalances created by its ultra-loose monetary policy, and by the media for what now seem to have been unduly pessimistic forecasts following the referendum (though the Bank’s numbers were no lower than those of most other economists, including our own),” Martins said.
Carney took over from Mervyn King as governor in 2013, initially committing to a five-year term at the Old Lady of Threadneedle Street ending in the summer of 2018, despite the traditional protocol of an eight-year term for governors.
However, following Britain’s decision to leave the European Union, Carney has extended his term a further year, allowing him to remain governor until the point when the UK should formally have left the EU.
“The decision means that Mr Carney will be at the helm when the UK leaves the EU in 2019 (assuming the timetable progresses as Prime Minister Theresa May has indicated), but not for long afterwards,” Martins said. “So his departure may come at a turbulent time.”
The fact that Carney didn’t opt for an eight-year term suggests he came under political pressure to step down early, according to HSBC.
The move won’t “completely quash speculation over political pressures, even though Mr Carney’s letter to the Chancellor clearly states that his decision reflects the same personal circumstances that led him only to want to serve five years in the first place,” Martin said.
Speculation about Carney’s future has been rampant in recent weeks, with the governor coming in for intense criticism from pro-Brexit politicians in particular. Conservative MEP Daniel Hannan has been a particularly harsh critic, repeatedly calling for Carney’s resignation in recent days.
He has also faced attacks from the likes of former Tory leader William Hague, failed Conservative party leadership candidate Michael Gove, and former chancellors Norman Lamont and Nigel Lawson.
Most of his critics feel he was too supportive of the Remain campaign prior to the EU referendum, and has politicised a role that is supposed to be purely technocratic.