Thanks to Mark Carney for staying until the end of Brexit negotiations – he’s just the sort of migrant Britain needs

The Governor of the Bank of England would have been slagged off just as badly if he had kept shtum over Brexit. He was damned if he did, damned if he didn’t

Mark Carney, Governor of the Bank of England will decide this week whether he wishes to extend his five-year term that ends in 2018 (AFP/Getty)

Thank you, Mark Carney – if Brexit is to be a success we needed him to stick around

The Governor of the Bank of England was being bullied by his critics over the referendum. But he would have been slagged off just as badly if he had kept schtum over Brexit. He was damned if he did, damned if he didn’t.

Good for Mark Carney. He is sticking around after all. Not, unfortunately, for as long as he is needed, but, it seems, until 2019, and thus probably the end of the Brexit negotiations. Then it will be for someone else to take up the role, just as the UK is leaving the EU. For sure, that will be the biggest challenge of all. Mr Carney will be a hard act to follow, and it may be difficult to find someone who is able, let alone willing, to sip from that lethally loaded chalice. That’s for another day.

It is certainly unfair. It is certainly a test of his mettle. I certainly expect him to pass it (and hang on to his dinner money). Carney seems not the sort of chap to be pushed around. Governors cannot be expected always to get on with their political masters, and they don’t. No matter; what matters is that they and their institution command the support of Parliament, from whence they derive their independence and status. That, I think, remains secure for Carney and his fellow members of the Monetary Policy Committee and the Financial Stability Committee.

Still, the speculation about Carney’s future has grown intense, with his enemies wanting him out as soon as possible, and his supporters urging him to hanging on in there until 2018 and beyond. His position is increasingly politicised, whether he wishes it or not. He has indicated that he will this week say whether he wishes to extend the five-year term that ends in 2018. If he wishes to, then he can be expected to stay in Threadneedle Street for the conventional eight-year stint, retiring in 2021. He has let it be known that it is a personal rather than political decision, presumably influenced by the interests and wishes of his wife and four daughters. Quite right too.

Still, it would be in Britain’s interests for Carney to stay on, and indeed, even consider staying on even after 2021, when the UK will be entering into the critical “real” phase of its post-EU economic career. The nation will need this talented man and his steady and independently-minded colleagues more than ever, and it is his duty (moral rather than legal), to defend the Bank, its independence and, less piously, Carney’s own reputation. We will need them to make the right judgements about the markets and interest rates precisely because what they said in the referendum campaign has indeed come to pass; that there would be a fall in sterling, a rise in inflation and a slowing (other things being equal) in growth, though the latter may take time to show up. Indeed on growth and much else it isn’t always clear how much was caused by the Brexit vote, being something of a hypothetical (ie set against a parallel-world Remain vote) you’ll never be able to see it as such. Whether you think a falling pound and higher inflation is good or bad is a matter of judgement in any case.

To use an expression favoured by the man Carney just put on the back of the new fivers, the Governor should ignore his critics and “keep buggering on”.

Why so? First, because to do otherwise would be tantamount to an admission of guilt to his critics who claim he was leaned on by the Treasury. He is not guilty of that. Yes, he did talk to the Chancellor, and it would be odd if he did not. That doesn’t make him a puppet. Carney did speak out about the economy during the referendum campaign, because he could not possibly have avoided doing so. It was different, the referendum, in quality and practicalities to general elections. It was a binary, game-changing event that had immediate consequences for the Bank’s ability to fulfil its remit. General elections change governments and policies in much less clear-cut ways, and elections are an order of magnitude more party political.

Rightly. To do otherwise would be tantamount to an admission of guilt to those critics who claim he was leaned on by the Treasury in the referendum campaign. He is not guilty of that. Yes, he did talk to the Chancellor, and it would be odd if he did not. That doesn’t make him a puppet. Carney did speak out about the economy during the referendum campaign, because he could not possibly have avoided doing so. It was different, the referendum, in quality and practicalities to general elections. It was a binary, game-changing event that had immediate consequences for the Bank’s ability to fulfil its remit. General elections change governments and policies in much less clear-cut ways, and elections are an order of magnitude more party political.

A referendum on a major economic fact of life, as on 23 June, requires the Bank to inform the people about the changing balance of risks with regard to the Bank’s ability to deliver financial and monetary stability, especially on inflation. They didn’t tell people how to vote, and the referendum was a cross-party affair on both sides. It was political, and the Bank could have put itself “in purdah” earlier and more comprehensively than it did, but it would have risked the opposite allegation. For Carney and the Bank would have been slagged off just as badly if they had kept schtum about what was going to happen to the pound and all the rest of it. They would have been called closet Brexiteers or somesuch. He was damned whatever he did about Brexit.

The main charge against Carney made by his critics is that he is “partisan”, a willing participant in “Project Fear” during the European referendum, and a hopeless stooge of the then Chancellor, George Osborne. Osborne, as we recall, appointed him to the job in 2103, so the usual conspiracy theorists believe him to be somehow indebted to his patron. The truth is that his remarks could easily have been taken to support the Remain campaign and so they were; but that doesn’t mean he was influenced to say those things by Osborne, or anybody else. He and his independent colleagues came to their conclusions – which are commonplace among professional economists – on their own. They did not produce propaganda to Osborne’s order. Had Carney stayed in purdah throughout the referendum campaign then the other side, the Remainers, would have been criticised for hiding the risks from the British people, and failing to give a full view of the background to their thinking. It would not, in short, have worked.

Carney, in short, is an excellent example of the kind of migrant Britain needs, whether this nation is in the EU or not. We are lucky to have him, if only for three more years or so. Hands off Mark Carney.