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Government urged to act on Mark Carney's offer to extend Bank of England service - as it happened Government urged to act on Mark Carney's offer to extend Bank of England service - as it happened
(3 months later)
Time for a recap:Time for a recap:
Mark Carney has taken a big step towards staying on as Bank of England governor to help Britain through the choppy waters after Brexit.Mark Carney has taken a big step towards staying on as Bank of England governor to help Britain through the choppy waters after Brexit.
After days of speculation, Carney revealed that he had offered to do whatever he could to ensure Britain’s exit from the EU was smooth.After days of speculation, Carney revealed that he had offered to do whatever he could to ensure Britain’s exit from the EU was smooth.
That’s a big hint that he could stay in post beyond June 2019 - potentially for another year, or even until the end of a Brexit transition period.That’s a big hint that he could stay in post beyond June 2019 - potentially for another year, or even until the end of a Brexit transition period.
He told the Treasury committee that:He told the Treasury committee that:
I am willing to do whatever else I can in order to promote both a smooth Brexit and effective transition at the Bank of England.I am willing to do whatever else I can in order to promote both a smooth Brexit and effective transition at the Bank of England.
The chancellor and I have discussed this. I would expect an announcement to be made in due course.”The chancellor and I have discussed this. I would expect an announcement to be made in due course.”
However, we don’t know exactly what Carney is proposing....However, we don’t know exactly what Carney is proposing....
Carney also flagged up that it could be easier to appoint a successor once there is more clarity about Brexit, and insisted there’s no shortage of good candidates for one of the biggest jobs in central banking.Carney also flagged up that it could be easier to appoint a successor once there is more clarity about Brexit, and insisted there’s no shortage of good candidates for one of the biggest jobs in central banking.
The Treasury has declined to respond, saying Mark Carney’s “speak for themselves”, but promised that an announcement is coming. Commitee chair Nicky Morgan is pushing for a quick decision.The Treasury has declined to respond, saying Mark Carney’s “speak for themselves”, but promised that an announcement is coming. Commitee chair Nicky Morgan is pushing for a quick decision.
Theresa May’s office has indicated that the PM wouldn’t oppose an extension to Carney’s contract, saying he has done a good job.Theresa May’s office has indicated that the PM wouldn’t oppose an extension to Carney’s contract, saying he has done a good job.
Carney also tried to placate Brexit-supporters, indicating that the prospect of Boris Johnson or even Jacob Rees-Mogg becoming PM wouldn’t shake his enthusiasm for the job.Carney also tried to placate Brexit-supporters, indicating that the prospect of Boris Johnson or even Jacob Rees-Mogg becoming PM wouldn’t shake his enthusiasm for the job.
Some City investors have welcomed the news, saying it would provide much-needed stability.Some City investors have welcomed the news, saying it would provide much-needed stability.
During the hearing at parliament, the Bank of England also warned MPs that a no-deal Brexit would drive up prices in the shops and send the pound tumbling (just the sort of comments that have upset Leave supporters in the past).During the hearing at parliament, the Bank of England also warned MPs that a no-deal Brexit would drive up prices in the shops and send the pound tumbling (just the sort of comments that have upset Leave supporters in the past).
As Carney put it:As Carney put it:
“It’s likely that the real income squeeze will return for households across the country.”“It’s likely that the real income squeeze will return for households across the country.”
“You can’t avoid that medium-term impact on real incomes.”“You can’t avoid that medium-term impact on real incomes.”
There was little reaction in the markets to Carney’s offer, with the pound dipping against the US dollar today.There was little reaction in the markets to Carney’s offer, with the pound dipping against the US dollar today.
Q: how much did the pound strengthen after Mark Carney said he’d stay on as Governor? A: erm, actually it weakened pic.twitter.com/0FZOx6j3zpQ: how much did the pound strengthen after Mark Carney said he’d stay on as Governor? A: erm, actually it weakened pic.twitter.com/0FZOx6j3zp
In other news...In other news...
Amazon has followed Apple to become America’s second $1trn company (although shares have dropped back from their earlier peak).Amazon has followed Apple to become America’s second $1trn company (although shares have dropped back from their earlier peak).
TSB CEO Paul Pester has (finally) paid the price for the bank’s IT meltdown.TSB CEO Paul Pester has (finally) paid the price for the bank’s IT meltdown.
Growth in Britain’s construction sector has hit a three-month lowGrowth in Britain’s construction sector has hit a three-month low
South Africa has lurched into recession, sending its currency sliding again.South Africa has lurched into recession, sending its currency sliding again.
That’s all for today. Thanks for reading and commenting. GWThat’s all for today. Thanks for reading and commenting. GW
Another central banker, Alan Greenspan, once remarked that “If I seem unduly clear to you, you must have misunderstood what I said.”Another central banker, Alan Greenspan, once remarked that “If I seem unduly clear to you, you must have misunderstood what I said.”
Mark Carney has hacked back to that particular Greenspan doctrine at times over the last five years.Mark Carney has hacked back to that particular Greenspan doctrine at times over the last five years.
And even today, as Channel 4’s business editor, Siobhan Kennedy, points out, we still don’t know exactly what’s happening over the governorship....And even today, as Channel 4’s business editor, Siobhan Kennedy, points out, we still don’t know exactly what’s happening over the governorship....
As ever with @bankofengland there’s interpretation required with Mark Carney’s words.He’s willing to do “whatever else I can...to promote a smooth Brexit” but does that mean stay on a bit longer or another year? Fact @hmtreasury hasn’t announced anything could suggest the former?As ever with @bankofengland there’s interpretation required with Mark Carney’s words.He’s willing to do “whatever else I can...to promote a smooth Brexit” but does that mean stay on a bit longer or another year? Fact @hmtreasury hasn’t announced anything could suggest the former?
Either way Mark Carney hasn’t said no, which will be reassuring to many. Likely they are still finalising the details. But these announcements usually happen the same day so slightly odd.Either way Mark Carney hasn’t said no, which will be reassuring to many. Likely they are still finalising the details. But these announcements usually happen the same day so slightly odd.
Back in the financial markets, Amazon just hit a $1trn market capitalisation.Back in the financial markets, Amazon just hit a $1trn market capitalisation.
Amazon’s share price rose over the ‘magic’ figure of $2050.27, making it the second US company - after Apple - to be worth $1,000,000,000,000.Amazon’s share price rose over the ‘magic’ figure of $2050.27, making it the second US company - after Apple - to be worth $1,000,000,000,000.
Amazon becomes world's second $1tn company https://t.co/aFplaV2o8TAmazon becomes world's second $1tn company https://t.co/aFplaV2o8T
Amazon’s value has surged in the last year, as the company has continued to post strong sales growth and cement its strong position in web services and the cloud.Amazon’s value has surged in the last year, as the company has continued to post strong sales growth and cement its strong position in web services and the cloud.
It’s super news for anyone who bought shares 20 years ago, or indeed last autumn!It’s super news for anyone who bought shares 20 years ago, or indeed last autumn!
Amazon market cap milestones:Sep 2018: $1 trillionOct 2017: $500 billionJun 2012: $100 billionOct 2009: $50 billionNov 1998: $10 billion Sep 1997: $1 billionAmazon market cap milestones:Sep 2018: $1 trillionOct 2017: $500 billionJun 2012: $100 billionOct 2009: $50 billionNov 1998: $10 billion Sep 1997: $1 billion
The Treasury committee hearing has wrapped up.The Treasury committee hearing has wrapped up.
And across the road in Westminster, Theresa May’s spokeswoman has confirmed that an announcement on Mark Carney’s future is being worked on.And across the road in Westminster, Theresa May’s spokeswoman has confirmed that an announcement on Mark Carney’s future is being worked on.
Reuters has the details:Reuters has the details:
British Prime Minister Theresa May thinks Mark Carney has done a good job as governor of the Bank of England, her spokeswoman said on Tuesday, adding that there would be further announcements on the matter.British Prime Minister Theresa May thinks Mark Carney has done a good job as governor of the Bank of England, her spokeswoman said on Tuesday, adding that there would be further announcements on the matter.
“The prime minister obviously thinks he has done a good job in his time as governor, and there will be more to say on that in due course,” the spokeswoman told reporters.“The prime minister obviously thinks he has done a good job in his time as governor, and there will be more to say on that in due course,” the spokeswoman told reporters.
Carney said earlier he was ready to extend his time in charge of the central bank to help Britain’s economy as it leaves the EU.Carney said earlier he was ready to extend his time in charge of the central bank to help Britain’s economy as it leaves the EU.
Nicky Morgan MP, Chair of the Treasury Committee, has urged the Treasury to make a decision about Mark Carney’s future soon - and press on with finding his successor too.Nicky Morgan MP, Chair of the Treasury Committee, has urged the Treasury to make a decision about Mark Carney’s future soon - and press on with finding his successor too.
She says:She says:
“In his evidence session with the Treasury Committee today, Mark Carney indicated that he is willing to stay as Governor of the Bank of England beyond June 2019 if it would assist the Government.“In his evidence session with the Treasury Committee today, Mark Carney indicated that he is willing to stay as Governor of the Bank of England beyond June 2019 if it would assist the Government.
“Stability is vital during this important period. The sooner the Government provides clarity, the better. Any extension to Dr Carney’s term should not be used to delay succession planning.”“Stability is vital during this important period. The sooner the Government provides clarity, the better. Any extension to Dr Carney’s term should not be used to delay succession planning.”
John Mann MP then asks BoE chief economist Andy Haldane how he’d deliver on Labour’s policy to make the Bank boost UK productivity.John Mann MP then asks BoE chief economist Andy Haldane how he’d deliver on Labour’s policy to make the Bank boost UK productivity.
Under this plan, the BoE would be set a new 3% productivity growth target (alongside its 2% inflation goal)Under this plan, the BoE would be set a new 3% productivity growth target (alongside its 2% inflation goal)
How, Mann asks, would this be achieved? What tools would be deployed?How, Mann asks, would this be achieved? What tools would be deployed?
Haldane scratches his ear, and explains that while such targets are a good idea, the key question is who is best placed to deliver them.Haldane scratches his ear, and explains that while such targets are a good idea, the key question is who is best placed to deliver them.
The Bank’s existing mandate for price stability and financial stability should help productivity growth, but they won’t deliver it on their own, he says.The Bank’s existing mandate for price stability and financial stability should help productivity growth, but they won’t deliver it on their own, he says.
In the long run, though, productivity growth depends on having a skilled and educated workforce, and infrastructure improvements.In the long run, though, productivity growth depends on having a skilled and educated workforce, and infrastructure improvements.
And, Haldane concludes, central banks do not build roads or railways, hospitals or schools. They don’t train apprentices, and they don’t teach schoolchildren.And, Haldane concludes, central banks do not build roads or railways, hospitals or schools. They don’t train apprentices, and they don’t teach schoolchildren.
Governor Carney adds that the Bank would have greater responsibility for productivity, but not more powers to solve the problems.Governor Carney adds that the Bank would have greater responsibility for productivity, but not more powers to solve the problems.
We wouldn’t have the tools, Mr Mann, to achieve it.We wouldn’t have the tools, Mr Mann, to achieve it.
The FT’s Chris Giles suggests this might put the bank in a sticky situation:The FT’s Chris Giles suggests this might put the bank in a sticky situation:
Finally Haldane says central banks do not build roads etcHe doesn't confront the questionCarney steps in and says we would have greater responsibility not power.Again, truth is an honest MPC would have to resign because they're being asked to deliver the impossibleFinally Haldane says central banks do not build roads etcHe doesn't confront the questionCarney steps in and says we would have greater responsibility not power.Again, truth is an honest MPC would have to resign because they're being asked to deliver the impossible
Unclear whether John Mann thinks his party's policy is nuts, which is the genius of the questionUnclear whether John Mann thinks his party's policy is nuts, which is the genius of the question
John Mann MP asks Carney if he’d still want to be Bank of England governor if Boris Johnson or Jacob Rees-Mogg were prime minister in June 2019.John Mann MP asks Carney if he’d still want to be Bank of England governor if Boris Johnson or Jacob Rees-Mogg were prime minister in June 2019.
Carney suggests that this wouldn’t put him off.Carney suggests that this wouldn’t put him off.
These jobs are technocratic jobs. You serve the remit set by parliament and the government of the day.These jobs are technocratic jobs. You serve the remit set by parliament and the government of the day.
A former Bank of England policymaker, Andrew Sentance, has criticised the whole circus around Mark Carney’s future.A former Bank of England policymaker, Andrew Sentance, has criticised the whole circus around Mark Carney’s future.
Today’s session follows days of speculation about whether the Treasury and the Bank were trying to hammer out an agreement to keep the governor for longer.Today’s session follows days of speculation about whether the Treasury and the Bank were trying to hammer out an agreement to keep the governor for longer.
That, Sentance told Radio 4’s World at One, bad for the central bank’s credibility:That, Sentance told Radio 4’s World at One, bad for the central bank’s credibility:
“It seems like the appointment of the governor is something that is happening between the Chancellor and the governor, and is not happening in a transparent way.“It seems like the appointment of the governor is something that is happening between the Chancellor and the governor, and is not happening in a transparent way.
“It seems an awful lot is happening in this appointment process behind the scenes and that is not good in terms of the independence of the Bank of England.”“It seems an awful lot is happening in this appointment process behind the scenes and that is not good in terms of the independence of the Bank of England.”
Treasury committee member Wes Streeting has welcomed Mark Carney’s offer to stay on longer, and hopes an announcement comes soon.Treasury committee member Wes Streeting has welcomed Mark Carney’s offer to stay on longer, and hopes an announcement comes soon.
Mark Carney confirms to @CommonsTreasury that he is in discussions with Treasury about extending his term beyond his anticipated departure date in June 2019. Makes sense, in my view, in light of Brexit and the sooner we have clarity on this the better.Mark Carney confirms to @CommonsTreasury that he is in discussions with Treasury about extending his term beyond his anticipated departure date in June 2019. Makes sense, in my view, in light of Brexit and the sooner we have clarity on this the better.
Ed Conway of Sky News suspects that Carney could actually extend his governorship to 2021, rather than leaving in June 2019 as currently planned.Ed Conway of Sky News suspects that Carney could actually extend his governorship to 2021, rather than leaving in June 2019 as currently planned.
That would mean a full eight-year stint (he started in summer 2013) - the standard term for BoE governors.That would mean a full eight-year stint (he started in summer 2013) - the standard term for BoE governors.
Breaking: Mark Carney signals he will extend his tenancy through the Brexit transition."I am willing to do whatever else I can to promote a smooth Brexit & effective transition... The Chancellor and I have discussed this. I would expect an announcement to be made in due course."Breaking: Mark Carney signals he will extend his tenancy through the Brexit transition."I am willing to do whatever else I can to promote a smooth Brexit & effective transition... The Chancellor and I have discussed this. I would expect an announcement to be made in due course."
The fact that Carney emphasised he is willing to stay on for the Brexit transition implies he might indeed stay until the originally-intended end of his term: mid 2021. So another two years rather than oneThe fact that Carney emphasised he is willing to stay on for the Brexit transition implies he might indeed stay until the originally-intended end of his term: mid 2021. So another two years rather than one
Chances of a hard Brexit, as far as market is concerned, have risen from 1 in 5 to 1 in 4 according to BoE chief economist Andy HaldaneChances of a hard Brexit, as far as market is concerned, have risen from 1 in 5 to 1 in 4 according to BoE chief economist Andy Haldane
Moments after signalling he's staying on as Governor, Mark Carney reminds Brexiteers why he so infuriates them, warning that a no deal Brexit would mean a return of the real income squeeze. And warns that the BoE may even have to RAISE interest rates if there's a hard BrexitMoments after signalling he's staying on as Governor, Mark Carney reminds Brexiteers why he so infuriates them, warning that a no deal Brexit would mean a return of the real income squeeze. And warns that the BoE may even have to RAISE interest rates if there's a hard Brexit
Q: How vulnerable is sterling to a sudden devaluation?Q: How vulnerable is sterling to a sudden devaluation?
Mark Carney takes a ‘glass half-full’ approach. He thinks the pound is currently suffering from the risk of a no-deal Brexit, so it might rise if an agreement and a transition deal is reached.Mark Carney takes a ‘glass half-full’ approach. He thinks the pound is currently suffering from the risk of a no-deal Brexit, so it might rise if an agreement and a transition deal is reached.
But if that doesn’t happen, the pound would move the other way, he explains.But if that doesn’t happen, the pound would move the other way, he explains.
Quilter Investors head of investment, Anthony Gillham, believes the UK government should accept Mark Carney’s offer to stay longer at the Bank of England.Quilter Investors head of investment, Anthony Gillham, believes the UK government should accept Mark Carney’s offer to stay longer at the Bank of England.
Gillham concedes that Carney hasn’t be “universally popular” (particularly with Leave supporters, who have hated his warnings about Brexit).Gillham concedes that Carney hasn’t be “universally popular” (particularly with Leave supporters, who have hated his warnings about Brexit).
But even so, Britain would benefit from an experienced hand at the top of the Bank in the likely turbulent times ahead.But even so, Britain would benefit from an experienced hand at the top of the Bank in the likely turbulent times ahead.
Gillham writes:Gillham writes:
“Central banks have done a lot of heavy lifting over the last decade in an effort to restore economic stability, although they have often been required to swim upstream against a current of destabilising political uncertainty. As if to illustrate the point, despite the Bank of England’s efforts to protect sterling over the summer, we have seen the pound chasing up positive sentiment around Brexit, before following it back down when the political rhetoric changes.“Central banks have done a lot of heavy lifting over the last decade in an effort to restore economic stability, although they have often been required to swim upstream against a current of destabilising political uncertainty. As if to illustrate the point, despite the Bank of England’s efforts to protect sterling over the summer, we have seen the pound chasing up positive sentiment around Brexit, before following it back down when the political rhetoric changes.
“If Mark Carney’s tenure is extended he will have his work cut out, but the case for an experienced captain to guide the UK through dangerous waters has grown stronger as Brexit negotiations have dragged on. He will install a measure of certainty on monetary policy, which provides some air cover through what will surely be an unpredictable spell. As Bank of England governor Mark Carney hasn’t always been universally popular, but appointing him as temporary caretaker through this period of transition does make sense.”“If Mark Carney’s tenure is extended he will have his work cut out, but the case for an experienced captain to guide the UK through dangerous waters has grown stronger as Brexit negotiations have dragged on. He will install a measure of certainty on monetary policy, which provides some air cover through what will surely be an unpredictable spell. As Bank of England governor Mark Carney hasn’t always been universally popular, but appointing him as temporary caretaker through this period of transition does make sense.”
The Treasury have declined to comment on Mark Carney’s comments today, but have confirmed that an announcement will come in due course.The Treasury have declined to comment on Mark Carney’s comments today, but have confirmed that an announcement will come in due course.
The committee have moved away from Mark Carney’s future, and onto the impact of artificial intelligence on the UK economy (are they suggesting the governor could be replaced by a robot?).The committee have moved away from Mark Carney’s future, and onto the impact of artificial intelligence on the UK economy (are they suggesting the governor could be replaced by a robot?).
Q: How many jobs will be lost to the fourth industrial revolution?Q: How many jobs will be lost to the fourth industrial revolution?
Chief economist Andy Haldane says estimates for gross job losses range from 10% and 50% of the global workforce - as jobs are automated or entire professions are replaced with software.Chief economist Andy Haldane says estimates for gross job losses range from 10% and 50% of the global workforce - as jobs are automated or entire professions are replaced with software.
Of course, you also need to factor in how many new jobs are created (coding all those robots etc)Of course, you also need to factor in how many new jobs are created (coding all those robots etc)
But the big picture is that the gross job losses due to AI, big data, etc, the gross job losses will be “at least as large and possibly larger as in previous industrial revolutions”, Haldane adds.But the big picture is that the gross job losses due to AI, big data, etc, the gross job losses will be “at least as large and possibly larger as in previous industrial revolutions”, Haldane adds.
Here’s our news story on governor Carney’s pledge to help Britain through Brexit by serving longer at the Bank of England:Here’s our news story on governor Carney’s pledge to help Britain through Brexit by serving longer at the Bank of England:
Mark Carney has confirmed he is in talks with the Treasury over staying on at the Bank of England to smooth any potential fallout from Brexit.Mark Carney has confirmed he is in talks with the Treasury over staying on at the Bank of England to smooth any potential fallout from Brexit.
Dropping the broadest possible hint he could remain at Threadneedle Street beyond his scheduled departure date in June, the Bank of England governor said: “Even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and an effective transition at the Bank of England.”Dropping the broadest possible hint he could remain at Threadneedle Street beyond his scheduled departure date in June, the Bank of England governor said: “Even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and an effective transition at the Bank of England.”
Carney confirmed he had held talks with the chancellor, Philip Hammond, over his future, and said an announcement would be made by the government “in due course”.Carney confirmed he had held talks with the chancellor, Philip Hammond, over his future, and said an announcement would be made by the government “in due course”.
Speaking to MPs on the Treasury committee, tasked with scrutinising appointments at the central bank, he said: “I am signalling a willingness to do whatever I can to support this process.”...Speaking to MPs on the Treasury committee, tasked with scrutinising appointments at the central bank, he said: “I am signalling a willingness to do whatever I can to support this process.”...
More here:More here:
Mark Carney hints he is willing to stay on at Bank of England
Charlie Elphicke MP disputes the Bank’s claim that food prices would surge if Britain left the EU without a deal next year.Charlie Elphicke MP disputes the Bank’s claim that food prices would surge if Britain left the EU without a deal next year.
Q: Couldn’t the UK set its own tariffs, meaning cheaper food imports from countries outside the EU?Q: Couldn’t the UK set its own tariffs, meaning cheaper food imports from countries outside the EU?
Carney says that any such cut in tariffs would be countered by a slump in sterling after a no-deal Brexit (driving up imports).Carney says that any such cut in tariffs would be countered by a slump in sterling after a no-deal Brexit (driving up imports).