London: The search for the next governor of the Bank of England is officially under way after the chancellor, Philip Hammond, said he was kickstarting the process nine months before Mark Carney’s departure date on 31 January 2020.
Carney, who took up the role of governor on 1 July 2013 when he was appointed by the then chancellor George Osborne, has twice agreed to extend his role in response to the Brexit vote. He was originally due to leave in 2018.
Hammond said: “In today’s rapidly evolving economy the role of governor is more important than ever. Finding a candidate with the right skills and experience to lead the Bank of England is vital for ensuring the continuing strength of our economy and for maintaining the UK’s position as a leading global financial centre.”
Carney was credited for responding with authority and calm in the immediate aftermath of the Brexit vote but the Bank’s predictions of a short-term shock to the economic growth failed to materialise. During his run as governor, UK interest rates have only changed three times and remain at only 0.75%.
Previously the head of Canada’s central bank, Carney received a total pay package of £881,574 in the year to the end of February. It included a £480,000 salary and an annual £250,00 allowance “to reflect the additional cost of living in London rather than in Ottawa”, according to the Bank’s annual report.
Attention will turn to Carney’s potential successors. Internal candidates potentially include Ben Broadbent, the Bank’s deputy governor for monetary policy, and Andrew Bailey, the chief executive of the Financial Conduct Authority. Others considered to be potential successors include Raghuram Rajan, the University of Chicago professor whose previous roles include head of the Reserve Bank of India and chief economist of the International Monetary Fund.
The governor of the Bank of England chairs the Bank’s three main policy committees, which oversee the UK’s monetary, financial and prudential policy. The new governor will also represent the Bank at meetings of the G7, G20, Bank for International Settlements and the IMF.
Hammond said: “I look forward to working with Mark Carney over the remaining months of his term as governor. His steady hand has helped steer the UK economy through a challenging period and we are now seeing stable, low inflation and the fastest wage growth in over a decade. And under Mark’s leadership the Bank of England has been at the forefront of reforms to make our financial system safer and more accountable.”
The Treasury has hired Sapphire Partners, a headhunting firm, to oversee the applications process. The company, run by an all female management team, describes itself as a “passionate believer in diversity” with expertise in providing “creative and balanced shortlists”. Cherie Booth, wife of the former prime minister Tony Blair, is a member of Sapphire’s advisory board. The deadline for applications is 5 June, with interviews to be held in London over the summer.