UK chancellor Sajid Javid has delayed the appointment of the next Bank of England governor until after the election, with the clock ticking down to the scheduled departure of incumbent Mark Carney at the end of January.
Responding to a flurry of speculation, the chancellor clarified the government’s position, citing his desire to ensure that the position of governor is seen to be independent of party politics.
The BoE and senior Treasury officials had also advised Mr Javid that any rushed appointment would undermine the choice if the Conservatives were not in government after the poll set for December 12.
After the election, the new chancellor will have little time to appoint a governor before Mr Carney leaves office on January 31 — also the new deadline for the UK to leave the EU.
On Friday, the BBC reported that Minouche Shafik, the head of the London School of Economics and a former deputy governor of the bank, was the government’s preferred candidate for the role.
The Treasury declined to comment.
Among the other leading candidates are thought to be two current deputy governors, Jon Cunliffe and Ben Broadbent, Shriti Vadera, chair of Santander UK, and Andrew Bailey, head of the Financial Conduct Authority.
If there is no clear government elected and a possibility of Britain leaving the EU without a deal on January 31, the BoE knows the government might ask Mr Carney to remain in his post for a few weeks longer. He has been studious in refusing to rule out that possibility although he has no desire to extend his term again.
The government would not have been able to make any appointment after Parliament had been dismissed for the election without the explicit support of opposition parties. John McDonnell, shadow chancellor, said in September that any rushed appointment would have been “inappropriate” with an election pending. He said last year he would want to appoint a governor “in tune” with Labour’s ideas if he became chancellor.
Speaking to journalists earlier in October in Washington, Mr Javid said the process of appointing the next governor was going “very, very smoothly”. At the time, the chancellor also insisted there would be a Budget on November 6, which was later abandoned.
On the search for a governor, he added: “I really value the independence of the Bank of England and I want someone who values that too and will be independent-minded.”
The repeated delays in appointing the governor will irritate the Treasury Committee of MPs which pressed Mr Javid about the possible delays after reports in the Financial Times.
The chancellor promised the committee he would ensure it had “the opportunity and time to scrutinise the successful candidate after the appointment has been made but before the individual has taken up the role”.
By convention, the Treasury Committee has a pre-appointment hearing with the new governor, but it has no power to veto any choice the prime minister recommends to the Queen.
Interviews for the job were undertaken in the summer and a list of candidates deemed to have the necessary qualities was given to Mr Javid. In his Washington briefing, the chancellor indicated that he had a candidate in mind, but would not comment further.
