Ministers are set to choose the next governor of the Bank of England in the coming days, in a move that should enable incumbent Mark Carney to leave the central bank on his scheduled departure date of January 31.
The frontrunners to succeed Mr Carney are Minouche Shafik, London School of Economics director; Andrew Bailey, Financial Conduct Authority chief executive; and Kevin Warsh, a former top official at the US Federal Reserve.
The Treasury stressed on Sunday that no final decision had yet been taken regarding Mr Carney’s successor and there was no certainty of an announcement before Christmas.
But with Boris Johnson’s Conservatives having won Thursday’s general election and Mr Carney due to leave the BoE next month, officials are keen for chancellor Sajid Javid to resolve the decision on the next central bank governor sooner rather than later.
Mr Javid is expected to keep his job in a cabinet reshuffle due this week and will already know who is on a shortlist of candidates for governor that was drawn up by officials over the summer.
Ms Shafik was the BoE deputy governor for markets and banking between 2014 and 2017 before leaving to take up the leadership of the LSE after having a difficult relationship with Mr Carney.
As governor she would need to demonstrate an ability to span the full range of the BoE’s work.
Her curriculum vitae includes stints at the World Bank, IMF and permanent secretary at the UK Department for International Development.
Mr Bailey has long been seen as a serious contender to succeed Mr Carney.
But questions have been raised about the effectiveness of the FCA under Mr Bailey’s leadership after a series of corporate scandals including the collapse of investment funds run by Neil Woodford, the one time star stock picker.
Mr Bailey was a popular official at the BoE, where he undertook a series of key roles, ranging from private secretary to the governor to chief cashier.
One latecomer to the race to succeed Mr Carney is the American Mr Warsh, who wrote a well-received report on accountability and transparency at the BoE in 2014.
He was also on the shortlist to become Fed chairman in 2018 when Jay Powell secured the role.
But while at the Fed, Mr Warsh had many critics of his monetary policy and regulatory stances, which included warning against quantitative easing in 2009 and the dangers of inflation in 2010.
As a crown appointment, the BoE governor will be formally chosen by the Queen on the recommendation of the prime minister.
The government has committed to ensuring the Commons Treasury select committee can question the successful candidate before he or she starts their eight-year term on February 1.
With the committee unlikely to be formed until the new year because of the election, Treasury officials did not rule out waiting until then to announce the governor.
