Bank of England Governor Mark Carney’s decision to remain in his post until 2020 has given a boost to the UK economy. Chancellor of the Exchequer Philip Hammond confirmed that Carney has agreed to stay in place past the date that the UK will leave the EU.
With many world markets in relative turmoil, it has seemed eminently possible that the UK pound could suffer significant effects due to Brexit. Carney has been able to provide serious stability during these uncertain times, and investors will see it as positive news that he has agreed to remain at the Bank of England for now.
Carney said that he will stay until the end of January 2020 and will oversee the initial period after the UK exits the EU in March 2019. Deputy Governor Sir Jon Cunliffe has also received a re-appointment to his position.
Hammond said in a statement that the deal took place to offer some certainty to the markets, as it “could be quite a turbulent period for our economy in the early summer of 2019.”
He added that despite citing “various personal pressures to conclude his term in June,” Carney will now carry on for a further seven months in a move that will “support continuity in our economy during this period.”
Hammond suggested that Carney’s decision will enable “vital stability” as well as a “smooth exit from the European Union.” His statement is likely to assure investors that there will be further time for the markets to react more calmly to some of the imminent Brexit deadlines, as any deal that will allow the two blocs to trade on set terms has yet to reach an agreement.
With no deal in place, the UK would have to resort to World Trade Organization (WTO) rules, but many leaders still think that this is unlikely despite the clock ticking forward.
Although October was originally the deadline to have a deal in place, even the most optimistic of negotiators on both sides have revised their expectations toward a November agreement at the earliest.
A special summit should take place soon, with a November date envisioned for the signing of a deal. This would still allow time to have the deal ratified on both sides of the table and move through a tough Parliament for Prime Minister Theresa May, who still lacks full support on either side of the political divide.
With many in May’s party alleged to be looking to oust her from leadership and her opposition almost consistently facing her down at every turn, it is far from certain that any deal will carry the support of the MPs needed to get any bill turned into law.
A UK government spokesperson confirmed that it is still working on a deal to suit all parties. Meanwhile, a series of conflicting reports led to a fluctuating pound that has struggled to find balance with so many different stories emerging. Big business leaders decrying the lack of a Brexit deal has tapered any real growth for the pound seen from optimism that a deal is not far away from being on the table.
The pound saw positive results from European Commission President Jean-Claude Juncker welcoming the progress and effort that the UK is putting in to securing a deal.