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Mark Carney to decide future after winning Theresa May's backing – business live Mark Carney to leave the Bank of England in 2019 – business live
(35 minutes later)
6.06pm GMT
18:06
Read Mark Carney's letter
Here’s the full letter which Mark Carney sent to chancellor Philip Hammond tonight, saying he would be “honoured to extend my time of service as Governor for an additional year to the end of June 2019.”
6.00pm GMT
18:00
CARNEY ANNOUNCEMENT: GOVERNOR TO SERVE EXTRA YEAR
BREAKING NEWS: Mark Carney has decided to staying on as Bank of England governor for another year.
The Bank of England has just announced that Carney will remain in post until the end of June 2019, 12 months longer than originally planned.
But crucially, Carney is not taking up the option of three more years -- despite Theresa May’s vote of confidence today.
Carney says this extra 12 months should cover the period over which Britain leaves the European Union, and will help “secure an orderly transition” to the UK’s new relationship with Europe.
More to follow!
5.50pm GMT
17:50
If you’re just tuning in, I’d better explain that the question on the City of London’s collective mind is whether Mark Carney decides to stay on at the Bank of England until 2021.
Under his original contract, he is due to leave in the summer of 2018, but he has the option to stick in the job for another three years.
Some pro-Brexit politicians have heaped heavy criticism on Carney, saying he was discredited for being unduly pessimistic about leaving the EU.
But earlier today, Theresa May’s spokeswoman gave him a resounding endorsement, saying:
“It is clearly a decision for him, but the PM would certainly be supportive of him going on beyond his five years.
The PM has always had a good working relationship with the governor of the Bank of England and intends to continue that.”
Carney and May then spoke for around an hour and a half today.
5.36pm GMT
17:36
Decision could come shortly....
We’re also hearing that a decision on Mark Carney’s future could come this evening....
Updated
at 5.40pm GMT
5.31pm GMT5.31pm GMT
17:3117:31
Investors would probably be reassured if Mark Carney announces he’ll stay at the Bank of England for another three years.Investors would probably be reassured if Mark Carney announces he’ll stay at the Bank of England for another three years.
This is from Reuters’ latest update on the governor:This is from Reuters’ latest update on the governor:
The career plans of a man once dubbed the “outstanding central banker of his generation” have gripped financial markets. Some of the recent slide in sterling and rise in government bond yields have been attributed by analysts to the prospect of Carney leaving the BoE.The career plans of a man once dubbed the “outstanding central banker of his generation” have gripped financial markets. Some of the recent slide in sterling and rise in government bond yields have been attributed by analysts to the prospect of Carney leaving the BoE.
“If Carney was to stay until 2021 that would somewhat reassure markets,” said Hetal Mehta, senior European economist with Legal & General Investment Management.“If Carney was to stay until 2021 that would somewhat reassure markets,” said Hetal Mehta, senior European economist with Legal & General Investment Management.
“It would be really unwelcome for (finance minister) Philip Hammond to have to find someone new over the course of next year when he will have a million and one other things to worry about.”“It would be really unwelcome for (finance minister) Philip Hammond to have to find someone new over the course of next year when he will have a million and one other things to worry about.”
5.00pm GMT5.00pm GMT
17:0017:00
While we wait for developments, here’s a video clip of Mark Carney responding to an MP’s question:While we wait for developments, here’s a video clip of Mark Carney responding to an MP’s question:
Mark Carney Vines at the ready https://t.co/Y6Op1tbuB4Mark Carney Vines at the ready https://t.co/Y6Op1tbuB4
4.59pm GMT4.59pm GMT
16:5916:59
Danny Blanchflower, a former Bank of England policymaker, has warned that Mark Carney is the main defence between Britain and chaos.Danny Blanchflower, a former Bank of England policymaker, has warned that Mark Carney is the main defence between Britain and chaos.
Writing in the Guardian tonight, Blanchflower says:Writing in the Guardian tonight, Blanchflower says:
Mark Carney is unequivocally not responsible for the slowing of the UK economy or the fall in the pound. Quite the contrary, he almost single-handedly turned around a potential collapse in output and sentiment in the days after the EU referendum on 23 June. Far from harming Britain, Carney has been the country’s saviour.Mark Carney is unequivocally not responsible for the slowing of the UK economy or the fall in the pound. Quite the contrary, he almost single-handedly turned around a potential collapse in output and sentiment in the days after the EU referendum on 23 June. Far from harming Britain, Carney has been the country’s saviour.
I have criticised the Bank of England governor rather harshly in the past, especially for his claim in August 2015, that “sustained momentum” in the UK economy and rising inflation would “likely put the decision as to when to start the process of gradual monetary policy normalisation into sharper relief around the turn of this year”.I have criticised the Bank of England governor rather harshly in the past, especially for his claim in August 2015, that “sustained momentum” in the UK economy and rising inflation would “likely put the decision as to when to start the process of gradual monetary policy normalisation into sharper relief around the turn of this year”.
That didn’t happen. But I have changed my mind. Right now we all need to stand behind Carney for the good of the country. Without him, chaos reigns.That didn’t happen. But I have changed my mind. Right now we all need to stand behind Carney for the good of the country. Without him, chaos reigns.
Here’s the full piece.Here’s the full piece.
My new column on Brexiteers “Stay away from a fool, for you will not find knowledge on their lips” Carney is saviourhttps://t.co/dTi6HRvEhlMy new column on Brexiteers “Stay away from a fool, for you will not find knowledge on their lips” Carney is saviourhttps://t.co/dTi6HRvEhl
4.44pm GMT4.44pm GMT
16:4416:44
We could get an announcement from the Bank of England tonight, according to Jason Groves of the Daily Mail.We could get an announcement from the Bank of England tonight, according to Jason Groves of the Daily Mail.
That’s not official, though -- so hopefully it won’t interfere with anyone’s trick or treating....That’s not official, though -- so hopefully it won’t interfere with anyone’s trick or treating....
Growing rumours of an announcement on Mark Carney's future tonight - cd come by 6pmGrowing rumours of an announcement on Mark Carney's future tonight - cd come by 6pm
4.34pm GMT4.34pm GMT
16:3416:34
Over at the Oxford Union, the US treasury secretary is educating students about the problems in the global economy.Over at the Oxford Union, the US treasury secretary is educating students about the problems in the global economy.
Jack Lew is running through a familiar litany of problems -- from corporate tax avoidance to worries about migration, and the rise of popularism among those who feel they’re getting an unfair deal.Jack Lew is running through a familiar litany of problems -- from corporate tax avoidance to worries about migration, and the rise of popularism among those who feel they’re getting an unfair deal.
Our economics reporter Katie Allen is tweeting the key points:Our economics reporter Katie Allen is tweeting the key points:
US Treas sec Lew says ppl worried abt a US econ that seems lopsided. Workers pay tax but intl firms seem to be paying nothing in some casesUS Treas sec Lew says ppl worried abt a US econ that seems lopsided. Workers pay tax but intl firms seem to be paying nothing in some cases
Lew recognises when ppl question old models they lash out and focus on immigration. "walls not the answer", but must not ignore anxietiesLew recognises when ppl question old models they lash out and focus on immigration. "walls not the answer", but must not ignore anxieties
On populism, Lew says one thing driving anger is "sense that there are different rules for people in companies that are very successful"On populism, Lew says one thing driving anger is "sense that there are different rules for people in companies that are very successful"
Lew says proud that fin system in better shape now to withstand shocks like Brexit vote but says must not lead to sense of complacencyLew says proud that fin system in better shape now to withstand shocks like Brexit vote but says must not lead to sense of complacency
Hopefully one of the students will ask Lew why the government he’s served in hasn’t managed to tackle these problems...Hopefully one of the students will ask Lew why the government he’s served in hasn’t managed to tackle these problems...
UpdatedUpdated
at 4.34pm GMTat 4.34pm GMT
4.19pm GMT4.19pm GMT
16:1916:19
That ‘pop’ in the pound a few minutes ago may simply be due to trading around the 4pm fix - when the value of the pound is recorded each day, City traders tell me.That ‘pop’ in the pound a few minutes ago may simply be due to trading around the 4pm fix - when the value of the pound is recorded each day, City traders tell me.
Today’s fix may be more volatile as it is the final reading of the month, so investors may be rebalancing their portfolios.Today’s fix may be more volatile as it is the final reading of the month, so investors may be rebalancing their portfolios.
End of month 4pm fix in FX - always spooky moves pic.twitter.com/DJpINszEEzEnd of month 4pm fix in FX - always spooky moves pic.twitter.com/DJpINszEEz
Here’s an explanation of The Fix.Here’s an explanation of The Fix.
UpdatedUpdated
at 4.21pm GMTat 4.21pm GMT
4.11pm GMT4.11pm GMT
16:1116:11
Here’s the official (no) comment from Downing Street about today’s meeting between Theresa May and Mark Carney.Here’s the official (no) comment from Downing Street about today’s meeting between Theresa May and Mark Carney.
“This was a scheduled, planned meeting that had been in the diary for a while.“This was a scheduled, planned meeting that had been in the diary for a while.
I’m not going to go into the details of the discussions.”I’m not going to go into the details of the discussions.”
4.05pm GMT4.05pm GMT
16:0516:05
Curiously, the pound just jumped by half a cent against the US dollar, to $1.2217.Curiously, the pound just jumped by half a cent against the US dollar, to $1.2217.
It’s also up half a percent against the euro, to €1.114.It’s also up half a percent against the euro, to €1.114.
It’s not clear what sparked this mini rally, or whether it will last.It’s not clear what sparked this mini rally, or whether it will last.
Carney and the pound. pic.twitter.com/CWxjsGFKYwCarney and the pound. pic.twitter.com/CWxjsGFKYw
UpdatedUpdated
at 4.13pm GMTat 4.13pm GMT
4.02pm GMT4.02pm GMT
16:0216:02
Theresa May’s spokeswoman won’t say how the meeting with Mark Carney went, alas.Theresa May’s spokeswoman won’t say how the meeting with Mark Carney went, alas.
*MAY SPOKESWOMAN WON'T COMMENT ON DETAILS OF CARNEY TALKS TODAY*MAY SPOKESWOMAN WON'T COMMENT ON DETAILS OF CARNEY TALKS TODAY
4.00pm GMT4.00pm GMT
16:0016:00
The long-term value of the pound will be determined by the terms of Britain’s exit from the EU and the trade deals it secures, not the identity of the Bank of England governor.The long-term value of the pound will be determined by the terms of Britain’s exit from the EU and the trade deals it secures, not the identity of the Bank of England governor.
So argues Neil Wilson of City trading firm ETX Capital, who says Carney’s future shouldn’t distract from the fundamental issues affecting the UK economy.So argues Neil Wilson of City trading firm ETX Capital, who says Carney’s future shouldn’t distract from the fundamental issues affecting the UK economy.
He writes:He writes:
Investors are selling the pound for a variety of reasons and the whole Carney saga doesn’t amount to a hill of beans for the currency....Investors are selling the pound for a variety of reasons and the whole Carney saga doesn’t amount to a hill of beans for the currency....
Sterling was the worst performing currency in October, having had its worst month since June, which has more to do with ‘hard Brexit’ talk since the Tory party conference than speculation over Mr Carney’s future.Sterling was the worst performing currency in October, having had its worst month since June, which has more to do with ‘hard Brexit’ talk since the Tory party conference than speculation over Mr Carney’s future.
For sterling what really matters is how Britain handles the Brexit process and what direction Theresa May and co plan to take the country in the coming months before invoking Article 50. The chief drivers of the pound value now are political, not which city Mr Carney chooses to live in. (Also if the economy continues to hold up well into next year we could see sterling crank higher.)For sterling what really matters is how Britain handles the Brexit process and what direction Theresa May and co plan to take the country in the coming months before invoking Article 50. The chief drivers of the pound value now are political, not which city Mr Carney chooses to live in. (Also if the economy continues to hold up well into next year we could see sterling crank higher.)
And while Mr Carney provides continuity and reassurance, it’s hard to see him doing an awful lot between now and 2018 that would be different to any other central banker.”And while Mr Carney provides continuity and reassurance, it’s hard to see him doing an awful lot between now and 2018 that would be different to any other central banker.”
UpdatedUpdated
at 4.08pm GMTat 4.08pm GMT
3.41pm GMT3.41pm GMT
15:4115:41
Even the satirists are having their say:Even the satirists are having their say:
As Michael Gove tells Mark Carney to “curb his arrogance”, Jacob Rees-Mogg says he should cut back on his over-privileged pomposity too.As Michael Gove tells Mark Carney to “curb his arrogance”, Jacob Rees-Mogg says he should cut back on his over-privileged pomposity too.