Bank of England 

What Carney remaining at Bank means for the base rate

What Carney remaining at Bank means for the base rate

The confirmation by HM Treasury that Mark Carney will remain as governor of the Bank of England is likely to mean interest rates remain low, according to Anna Stupnytska, global economist at Fidelity International.

She said Mr Carney remaining at the Bank for an extra year until 2020 means the monetary policy committee is likely to continue to pursue a "doveish" policy.

Economists call central bankers who are less worried about inflation than they are about unemployment doveish.

Doviesh central banks are less likely to put interest rates up.

She said Mr Carney has been doveish during his time at the central bank, and she expects this to continue, meaning interest rates will rise at a slower pace than might have happened with a different person at the head of the central bank.

James Lynch, investment manager at Kames Capital, said: "The Bank of England's leadership change was an event that could have been a distraction, and indeed with the best will in the world, we do not know what the UK economy will be facing, so if some deal gets done on Brexit at least we will be in a transition period, but there are other tail risks, such as a no-deal crash out or even Brexit not occurring.

"Regarding Carney's actions, what you can say is that the consumer and the economy held up far better than even the most optimistic economist forecasted at the end of 2016 and in 2017.

"Carney time and time again, defended his actions, and essentially he made a trade-off, opting for growth and jobs rather than inflation.

"Indeed, with Bank rate at 0.25 per cent and long end yields at 1.7 per cent, and with the certainty that mortgage costs, and borrowing costs for business were going to stay extraordinarily low, that was undoubtedly a positive for the economy."

david.thorpe@ft.com

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