May Backs Carney After Doubting Whether BOE Actions Helped

Updated on
  • Carney defended central bank independence at event on Friday
  • Governor to decide this year how long to stay at BOE

Mark Carney has received the backing of Prime Minister Theresa May, countering perceptions of tension between the Bank of England governor and the government.

May is “clear in her support of the governor and the leadership he’s shown in the last few months,” her spokeswoman Helen Bower told reporters in London on Monday. The voicing of support follows a similar sentiment from Chancellor of the Exchequer Philip Hammond, who told Bloomberg last week that Carney is “doing a good job.”

The comments come as Carney counts down to a self-imposed deadline of the end of the year to decide whether he will serve a full eight-year term through 2021. When he initially took over the BOE in 2013, he said he would stay for five years.

May sparked controversy during a speech to the Conservative Party Conference this month, when she said that some central bank actions were not working for average Britons. Savers have been hit by low interest rates, while looser policy has also affected pension returns. Asked about political interference last week, Carney said that while the government defines the BOE’s remits, he and his colleagues act independently.

“The objectives are what are set by the politicians, the policies are done by technocrats,” he said at an event in Birmingham on Oct. 14. “But we’re not going to take instruction on our policies from the political side.”

Meanwhile, Hammond also received the prime minister’s approval after newspaper reports that he clashed with cabinet colleagues over Brexit plans. During a meeting to discuss immigration proposals -- including plans for a new work permit system -- Hammond was said to have preached greater caution, attracting criticism from colleagues.

May has “full confidence in the chancellor and the work he is doing,” said Bower. “We all need to work together to make sure we make a success of Brexit.”

(Updates with Hammond support starting in penultimate paragraph.)
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