Carney: I will stay ‘as long as I can’

Mark Carney's decision on whether to stay on as governor of the Bank of England (BoE) after 2018 will be an "entirely personal" one, he told the Economic Affairs Committee of the UK's upper house of parliament, the House of Lords, today (October 25).

Carney was asked what factors would influence his decision on whether to serve his full term as governor, which would take him to 2021.

"To be clear, it is an entirely personal decision. And no-one should read anything into the decision in terms of government policy: actual, imagined, past, present, etc," he said. When Carney first took on the role, he had stated a desire to step down in 2018.

The governor stressed it has been "a privilege" to serve as governor – a role that he says requires "total attention and devotion". "I intend to do it for as long as I can," he said.

Carney, the first non-Briton to take the role, was appointed governor in 2012 by then finance minister George Osborne.

During the UK's European Union referendum campaign, Carney was criticised for giving what were seen by some as pro-EU statements, warning of the risks the UK economy might face should the majority vote to leave the union.

Many ‘leave' campaigners and sections of the media called for his resignation, but the governor, and other members of the bank's senior management, stood by his comments.

Pension problems

The committee pressed Carney on the effects of the bank's policies on savers and pension holders – a topic deputy governor Ben Broadbent was also recently quizzed on.

"Yes, I have sympathy. Yes, I understand the frustration," Carney said, when asked whether or not he feels empathy for savers who are close to having spent almost decade under ultra-low interest rates.

"However, we have to step back and ask why interest rates are so low," Carney added. "Is this a caprice of central banks, who have just decided for fun that we are going to keep interest rates low? Are we ignoring our remit, our mandate, to achieve the 2% inflation target? Or are there are broader forces at work?"

Like Broadbent, Carney explained it was, in fact, the "sharp" fall in the level of equilibrium interest rates that has been harming pension savers, while in general the monetary policy response from the BoE has "supported" the UK economy through a period of "difficult adjustment".

Some members of the committee were not convinced that all the measures deployed by the central bank were necessary, with former finance minister Norman Lamont claiming quantitative easing (QE) would "just end in tears".

"I do not share that view, I'm afraid," Carney replied. The governor said the recent package of measures decided upon by the monetary policy committee had four elements, stressing that the BoE would not "slavishly rely" on QE if additional stimulus were required. "We are mindful of the side effects of QE," he said.

Earlier today, UK finance minister Philip Hammond said he could not see a situation whereby he would reject a request from the BoE to buy more bonds.

"Although I cannot prejudge any hypothetical request, no request for QE has ever been refused. And I see no reason why circumstances would be different in future," Hammond said during an appearance in the UK's lower house.