Chancellor says hunt for new Bank of England governor ‘on track’

Bank of England Carney

Sajid Javid has insisted that the recruitment of a new Bank of England governor is “on track”, despite the prospect of an imminent election that could delay the process.

The chancellor told the Treasury select committee that he would “make the announcement in due course, ahead of the start of the next governor’s term on February 1, 2020”.

MPs “will have the opportunity and time to scrutinise the successful candidate after the appointment has been made but before the individual has taken up the role”, he added.

Concerns are growing that the Treasury may have to ask Mark Carney to extend his term once again because of the political chaos holding up the process. Philip Hammond set the ball in motion in April, when he was chancellor. He formally advertised for a successor and signalled that he expected to make an appointment this month. However, Brexit has thrown a spanner in the works. Mr Hammond handed over to Mr Javid in July, who will not name a successor until after an election. Candidates have been told that the recruitment is effectively on hold.

The governor of the Bank is considered the most powerful unelected person in the country, with oversight of interest rates, the banks and the ability to ration mortgage credit if it is felt necessary. Mr Carney has been in the post since July 2013.

The shortlist is thought to include Baroness Vadera, 57, chairwoman of Santander UK, Andrew Bailey, 60, chief executive of the Financial Conduct Authority, and Dame Minouche Shafik, 57, director of the London School of Economics. Dame Helena Morrissey, 53, a City fund manager, has been interviewed but it is not known if she met the strict appointability criteria. Ben Broadbent, 54, deputy governor for monetary policy, is a leading internal candidate. Gerard Lyons, 58, has been interviewed but is not thought to have made the shortlist. His links to Boris Johnson, for whom he acted as economic adviser when the prime minister was London mayor and his well-reasoned pro-Brexit economics keep his candidacy alive, however.

Mr Hammond had hoped to lure international figures such as Raghuram Rajan, the former Bank of India governor, and Kevin Warsh, a former US Federal Reserve governor, but the political backdrop deterred them from applying.

An election in late November or early December could push the process to the limit. An independent Treasury panel vetting the applicants is believed to have drawn up a shortlist, which would leave the chancellor to conduct final interviews and make a decision. But a Labour or coalition government may want to propose a different candidate.

The Treasury committee will also want a couple of weeks to scrutinise the appointment, although it does not have a power of veto. Catherine McKinnell, interim chairwoman of the committee, said it was “welcome” that the chancellor had assured her that the committee “will have the opportunity and time to scrutinise the successful candidate before they take up their role”.

Mr Carney, 54, made a speech on climate change in Tokyo yesterday, where he confirmed that the Bank would stress-test the UK financial system against climate risks. He has been a driving force behind efforts to make markets price climate change properly, to ensure that boardroom decisions reflect real environmental risks.