Bank of England governor extends term to deal with Brexit

Mark Carney will stay until June 2019 as the UK negotiates its European Union departure...

Bank of England governor extends term to deal with Brexit

Bank of England governor Mark Carney leaves Downing Street, London. Picture by Dominic Lipinski PA Wire/PA Images

Bank of England governor Mark Carney is set to extend his term by one year to help secure an "orderly" exit from Europe.

But the decision to stay until June 2019 falls short of speculation that he would serve a full eight-year term until 2021.

Carney said in a letter to UK Chancellor Philip Hammond, that he was staying on beyond the initial five-year period he said he would serve.

His six-year tenure as governor will be the shortest since the 1960s, with his immediate predecessor Mervyn King having served for 10 years.

Carney's announcement came mere hours after British Prime Minister Theresa May backed him to extend his five-year term.

He said:

"I would be honoured to extend my time of service as governor for an additional year to the end of June 2019.

"By taking my term in office beyond the expected period of the Article 50 process (for Britain to leave the EU), this should help contribute to securing an orderly transition to the UK's new relationship with Europe."

Hammond said that he was "very pleased" at Carney's decision to stay on.

The pound steadied at just over $1.22 against the US dollar, about half a cent up on the day.

Carney, who earlier met May in Downing Street, had come under pressure from critics over his warnings before the EU referendum about the economic dangers of a Leave vote.

He has also felt the need to defend the bank's independence from politicians, after a speech by May at the Conservative Party conference seen as critical of his use of low interest rates to boost the economy.

Sir Martin Sorrell, boss of advertising giant WPP, told Sky News that a one-year extension for Mr Carney was "better than nothing" but it was a pity he would not serve his full term.

He said the governor may have been "a little bit bruised by the criticism that he was subjected to" in the wake of the Brexit vote.

Sorrell defended Carney's warnings over the economic impact of a 'Leave' decision and the bank's actions in cutting interest rates afterwards.

Additional reporting by IRN