Who will replace Mark Carney as Bank of England governor?

The Bank of England will this week reveal its latest monetary policy decision, with investors having performed an abrupt u-turn on their bets it will raise rates.

Investor bets indicate a probability of only seven per cent for a May hike, compared to an implied probability of more than 71 per cent at the end of March, according to calculations by Simon French, chief economist at Panmure Gordon. In February the Bank gave a clear signal it was planning to raise rates in May.

Yet while bets on a rate hike may have turned, the market on who will replace Bank governor Mark Carney, who has only a year of monetary policy-making left, has only started to heat up.

Read more: Betting suspended on Andrew Bailey to be next Bank of England governor

Chancellor Philip Hammond has already said he is scouring economic forums for top candidates, in a sign he might plump for someone outside of the favourites within the monetary policy committee.

Carney will leave the Bank on 30 June 2019. The Treasury is expected to advertise for a new governor in late summer or autumn of this year, in line with the practice followed when Carney was appointed in 2012. The former Bank of Canada head was then unveiled in November 2012.

While Carney was the governor for the post-crisis reform of financial system regulation, his successor will be responsible for stewarding banks and the broader economy through most of the Brexit process.

Andrew Bailey, the current head of the Financial Conduct Authority (FCA), is regarded almost universally by City economists as the front-runner for the job. Ladbrokes give odds of 4/5 on Bailey, who previously spent more than 30 years at the bank; Betway caused a stir (perhaps deliberately) when they suspended betting last month.

Other frontrunners include deputy governor for monetary policy Ben Broadbent and Hammonds former chief economic adviser Dave Ramsden.

The contenders

Andrew Bailey

A former private secretary to the ex-governor Eddie George, Bailey knows how things work behind the scenes at Threadneedle Street. His name still graces £20 bank notes from a stint as chief cashier, while as executive director for banking he was intimately involved in financial crisis fire-fighting. On the monetary policy side he has also headed the international economic analysis division. “Reassuringly dull”, says one City economist – although the FCAs awkward handling of RBS and Beaufort scandals are black marks.

Ben Broadbent

The Banks monetary policy boss has experience at the Treasury and is a confident economist. A trained concert pianist (and, like Carney, a Goldman Sachs alumnus), he is literally Carneys right-hand man in press conferences.

Sharon White

The current head of media regulator Ofcom is highly respected as an economist, having managed the public finances as second permanent secretary to the Treasury before 2013. Previously at the World Bank and Downing Street, she would become the first ever female and non-white Bank governor.

Dave Ramsden

Apparently a big cycling fan, Ramsden is one of the economists who kept the UK out of the euro. One City economist tips the 54-year-old as the “younger man”. As chief economic adviser to the Treasury he has had close links to the Bank for years and is seen as down to earth.

Raghuram Rajan

Few economists come with such a formidable reputation as Rajan. The former International Monetary Fund (IMF) chief economist was credited with bringing macroeconomic stability to the State Bank of India until 2016 – “would be an excellent governor if the BoE could get him”, says one hopeful City economist.

Christine Lagarde

Speaking of the IMF, Lagarde has been head of the supranational body since 2011. A former lawyer and French finance minister, few doubt her credentials – although it would be a brave chancellor to appoint such a vocal Brexit critic to the symbolic role. Meanwhile, the European Commission top job may also be up for grabs.

Best of the rest

Andy Haldane: Bank chief economist, but has upset some in the City and Westminster with unorthodox style.

Jon Cunliffe: Former permanent representative to the EU and now charged with financial stability, would not be a surprise.

Lael Brainard: Undersecretary of the US Treasury under Obama, the Federal Reserve board member would be a strong candidate.

Robert Chote: The head of the Office for Budget Responsibility (and Sharon Whites husband) knows his way around the British economy and the corridors of financial power.

Adair Turner: Respected by economists, but chance may have passed him by when Carney beat him to the punch.

Jim ONeill: The former Goldman Sachs chief economist stepped down as Treasury minister after George Osborne was booted out from Number 11. Has previously denied he would to at least one City economist, but if Hammond came knocking…




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