The Bank of England deputy governor, Ben Broadbent, has said the whole country should be grateful that Mark Carney is staying on as governor until 2019.
Speaking on BBC Radio 4’s Today programme, Broadbent also said the pound could rebound if the economy continued to surprise on the positive side.
Carney ended speculation about his future earlier this week by agreeing to stay on until Brexit negotiations with the EU have ended in 2019. This means he will serve an extra year, but that is still two years short of a full eight-year term.
Broadbent said: “I’m extremely happy that the current governor is staying. I think the whole country should be grateful that he is.”
When asked whether he would like to be the Bank’s next governor – Paddy Power is offering odds of 7-4 on this happening – Broadbent, a former Goldman Sachs economist, said: “He [Carney] is staying on another almost three years. That is far too far away for me to think about what I’m going to be doing then ... I haven’t even thought about it.”
His comments came the day after the central bank lifted its growth forecasts and warned households to expect a sharp rise in inflation next year as the weak pound pushes up the cost of imports. It hinted that further interest rate cuts were unlikely because the economy has held up better than expected since the referendum, with consumer spending particularly strong.
Broadbent said: “It is apparent that financial markets have taken one view and implicitly so far at least households so far have taken another. We don’t know who is more right because we don’t yet know how this process [Brexit] will unfold.
“Presumably at some point there will be something of a reconciliation and if it turns out better than financial markets are currently expecting for the economy over the longer run then you’d expect to see the currency bounce back.”
He rejected criticism from the Brexit camp that the Bank was out of touch with the real economy. “It’s always the case that we have to revise our view as news comes in,” he said. “We widened our fan charts [growth and inflation predictions] in August following the result of the referendum precisely because of the more uncertain environment we are now confronted with.”
The Bank has come under heavy criticism recently, including from the prime minister, who at the Conservative party conference criticised the “bad side effects” of ultra-low interest rates and the Bank’s money creation programme.
Broadbent responded: “We live in a democracy. People can comment on the way all our policies are conducted. It is our job to be open and transparent about what we do. For our part we’re just focused on our job. We have a remit given to us by parliament and we look at all the economic evidence and as economists regarding that remit we take the best possible decision we can at any point in time.”
