Given the less than fanatical following Carney has built up in some political circles, especially among Brexiteers, he might be feeling rather smug about his current situation – perceived as the safe pair of hands to lead the bank through the early post-Brexit period.
Theresa May has given her blessing to the extension and Carney recently told the Treasury Select Committee he would do anything he could to lessen some of the turbulence that, he clearly feels, Brexit will bring.
Carney is already on the record as saying that a no-deal Brexit would sink the pound and cause a real income squeeze – with his comments yesterday to the prime minister and cabinet adding to that.
One wonders whether his decision to stay on might come with some noticeable caveats about the government doing all it can to steer away from such a result.
Not shy
A number of his most vocal critics already believe he has taken up a role which is far too politicised.
However, as we move towards next March the chances of that being toned down seem highly unlikely given Carney has not shied away from delivering the Bank’s negative predictions for Brexit Britain and we shouldn’t expect him to do so now.
It is no wonder that Brexiteers are calling for him to go.
That outcome however couldn’t seem any further away especially as, with all the political turbulence, Carney might well be one of the few constants for the UK economy in the months and years ahead.
Plus, there’s no guarantee any of the current political ruling class will still be in their positions of power by the time the governor does walk way.
Act decisively
Courting Carney to be that constant certainly makes economic sense, even if some of his most arch-critics want anyone but him in the role.
However, it must also be factored in just who would be able to take over from him anyway, and whether anyone in their right mind would want to do it in the next couple of years.
The phrase ‘poisoned chalice’ comes to my mind.
From a housing and mortgage market perspective, Carney continuing to stay on as governor does seem to give a greater degree of certainty about how the bank might act in the future, particularly in terms of interest rate decisions.
Brexit-based events may well get in the way but the recent increases seem to be keeping with expectations and there is a far greater degree of certainty that the bank will act decisively (should it need to) with Carney in office, than with a new, untried and untested governor.
Carney appears to be going nowhere fast, and given everything else that is going on, we should perhaps be grateful for that.
