Martin Flanagan: Mark Carney extends tenure for Brexit

Mark Carney is to stay on at the Bank of England until June 2019. Picture: Ian Rutherford

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It is honourable and welcome that Mark Carney is extending his tenure as governor of the Bank of England by one year to June 2019 to provide central banking continuity during the crucial Brexit negotiations.

If that displeases the more rabid Brexiteers, so be it.

They had wanted Carney to leave early, and they have partly got their way because the Canadian has for “personal reasons” decided not to extend his tenure to the full possible eight years that would have taken him to June 2021.

Mark Carney to step down in June 2019

As far as an elegant solution is possible in the febrile mood surrounding Brexit, this is probably it. But it is still difficult to understand the anti-Carney ferocity. It looked petty and tunnel-visioned.

The Leave camp felt the governor overstepped the mark in warning ahead of June’s referendum of short to medium term economic volatility if the UK quit the EU. It believed that the referendum was a sovereign decision of the people, and that he should to all intents have stayed out of it.

But it would be bizarre if a decision of such material economic importance should have had Carney in purdah. His duty was to warn of the challenges as well as opportunities of Brexit.

Similarly, in the Scottish independence referendum when the Bank governor ruffled feathers by saying monetary union between an independent Scotland and England and Wales was incompatible with sovereignty. What, the near-implosion of the euro did not make that a reasonable conclusion?

There were other issues at stake in the EU vote, such as control of Britain’s borders and acceptance of the paramountcy of the EU judiciary. But the disputed economic consequences of Britain opting out was, and is, fundamental as well.

The idea that George Osborne hired Carney as governor only to say “please shut up” when seminal economic developments are in prospect was deluded.

Carney has not done everything right in his stewardship, and his policy of “guidance” on UK interest rates had patchy success. But his tenure has been far from cackhanded and amid the central banker hospital pass that was Brexit he just did his job. He has also behaved with a decorum his shriller critics lack.

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