Mark Carney hailed as 'outstanding' banker

 

Hailed as the “outstanding central banker of his generation”, Mark Carney will be the first non-British citizen to govern the Bank of England in its 319-year history when he takes the helm on Monday.

The Canadian was hand-picked by Chancellor George Osborne to head the Old Lady of Threadneedle Street and becomes the most powerful unelected official in Britain.

The 48-year-old will head an institution now responsible for financial stability and keeping Britain's banks on an even keel - as well as its main task of monetary policy.

Mr Carney arrives from the Bank of Canada, where he is credited with helping the Canadian economy recover faster from the downturn than any other developed major nation.

While Britain struggles to establish growth, Canada has recovered all of the output it lost during its 2008/09 recession, while creating 480,000 more jobs.

In his valedictory speech entitled "Canada works", Mr Carney said Canada was "unique" among leading Western economies when it came to the financial crisis.

"For us, the global financial crisis was an external rather than internal shock," he said.

"When Canadian policymakers responded quickly and forcefully, our financial system channelled credit to where it was needed and our economy adjusted smartly."

It was this track record which prompted Mr Osborne to overlook favourites including Bank veteran Paul Tucker and Adair Turner, the former chairman of City watchdog.

Mr Carney, who will receive an £874,000 pay package - including a £5,000-a-week housing allowance - inherits a venerable institution which has expanded rapidly in recent years.

The Bank's workforce has almost doubled to 3,500 from about 1,800 in 2008.

He has already started shaking up the Bank, recently appointing a senior female banker to the new role of chief operating officer to help "catalyse change".

Charlotte Hogg, the head of retail at Spanish-owned lender Santander UK and the daughter of former Conservative minister Douglas Hogg, will take responsibility for all day-to-day management of the Bank.

Mr Carney will serve a five-year term, and only agreed to take the job after the term was cut from eight years - partly to reduce disruption to his children.

"In my experience, there are limits to these highly rewarding but ultimately punishing jobs," he told MPs when quizzed about his appointment.

The ice hockey fan, born in Fort Smith in the Northwest Territories of Canada, describes himself as someone who knows "how to lead, when to delegate and how to forge consensus".

He studied at Harvard and Oxford universities, and had a 13-year career with Goldman Sachs before becoming deputy governor of Canada's central bank in 2003.

In 2008 he stepped up to governor, just as the financial crisis was erupting.

He takes the reins as Britain's economy emerges slowly from a five-year slump.

Early indications suggest an activist approach to monetary policy, after he urged central banks to ensure "escape velocity" for their economies, suggesting a further boost in quantitative easing (QE).

He told the World Economic Forum's annual meeting in Davos that policy was not yet "maxed out".

He later told Britain's Treasury Select Committee that he favoured flexible inflation targeting - where the rate is allowed to stray from target, as it currently is in the UK - as the "best" policy.

But his arrival comes with financial markets struggling to come to terms with the prospect of central bank support tapering off - especially in the United States - with economic data beginning to show signs of improvement and policymakers anxious about driving up inflation.

A sharp lending squeeze in China in recent weeks has also cast doubt over growth in the world's second biggest economy, causing further ripples of nervousness across global stock markets.

While Threadneedle Street is currently more focused on the holy grail of growth rather than inflation remaining stubbornly above its 2% target, the Bank will be concerned the City does not see it as overly lax in its approach to price rises as it deploys its twin weapons of interest rates and QE to stimulate the economy.

It means that while there is little sign of the Bank rate being increased any time soon from its historic low of 0.5%, there is some resistance on the Monetary Policy Committee (MPC) to lifting QE from its current level of £375 billion.

Howard Archer, UK economist at IHS Global Insight, predicts that while better economic data will relieve pressure on Mr Carney to act imminently on more QE, he is bound to do so in the coming months.

He said: "We suspect that Mark Carney will be keen to try and build up escape velocity from the economy's extended softness and will want to establish his presence."

But whatever the new governor's preference on taking office may be, he is likely to find that, like outgoing governor Sir Mervyn King, he cannot impose his will on the MPC.

In recent months, Sir Mervyn has been consistently outvoted in his aim to boost QE by £25 billion to £400 billion, by a six-three majority on the committee.

Whether Mr Carney - variously described as a "rock star" and the George Clooney of central banking - can sweep away the doubts of fellow policymakers remains to be seen.

PA

Start your day with The Independent, sign up for daily news emails
New Articles
tvDownton Abbey Christmas special
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
News
news
PROMOTED VIDEO
News
i100
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
Japanese artist Megumi Igarashi showing a small mascot shaped like a vagina
art
News
The Queen delivers her Christmas message
newsTwitter reacts to Her Majesty's Christmas Message
Arts and Entertainment
tv
Life and Style
fashion
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all