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May Backs Carney to Stay on at Bank of England

(Reuters) – Prime Minister Theresa May believes Bank of England governor Mark Carney is the best man for the job and should stay on in his role, May’s spokeswoman said on Monday, dampening speculation that he would quit.

Carney, who has come under fire from supporters of Brexit for his stance in the EU referendum campaign, has said he will announce by the end of the year whether he will take up an option to stay at the BoE until 2021 rather than stick to his current departure date in mid-2018.

“The PM has been clear in her support for the governor, the work he is doing for the country,” her spokeswoman said.

“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.”

Asked if Carney was the best man for the job, the spokeswoman said: “Absolutely.”

Carney’s plans have gripped financial markets after a weekend of conflicting media reports over his future, with his possible early departure cited as a risk to sterling, which has already been driven down by the perceived negative effects of Britain’s exit from the EU.

STAY OR GO?

News reports on Monday said Carney is leaning towards deciding to serve a full eight-year term, despite critics calling for him not to extend his time in charge of the British central bank.

Carney will meet May later on Monday for a regular meeting, May’s office said. He is due to hold a quarterly Bank of England news conference on Thursday and could make an announcement on his decision then.

The Financial Times reported that the Canadian, who joined the Bank in 2013, was ready to serve a full eight-year term instead of five. The BBC also said people close to Carney believed he was leaning towards staying for eight years.

Those reports contrasted with others in newspapers over the weekend that said Carney was more likely to announce that he would leave in 2018.

The Sunday Times said Carney was unhappy with May’s office and had a closer relationship with former finance minister George Osborne, who had recruited him, than with the current minister Philip Hammond.

Earlier this month, May took the unusual step of criticising the effects of the Bank of England’s low interest rates, prompting push-back from Carney who said he would not be told how to do his job by politicians.

The governor is expected to confer with May and Hammond before making a decision, the FT reported.

Last week, Carney said his decision whether to stay would be based on personal rather than political considerations, and he would need to find some time to make up his mind.

 

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