Matthew Lynn

Mark Carney’s replacement must be a Brexiteer

Mark Carney's replacement must be a Brexiteer
Text settings

Almost half a million a year basic. A generous housing allowance. Lots of invitations to swanky conferences, and a fantastic office right in the centre of town. And all the last guy had to do during six years in the job was tweak interest rates three times. That works out at a million per move – and that’s before expenses. Running the Bank of England is, on the surface at least, such a cushy job I might even apply myself. We never even have a decent sterling crisis to contend with any more.

And yet despite that, there are already reports that the Chancellor might have trouble finding anyone to take over from Mark Carney next year. The Treasury advertised the vacancy this morning and started tweeting it out immediately, perhaps in the hope of drumming up some interest.

The problem? The argument is that our departure from the EU means many of the most distinguished central bankers will be reluctant to take on the job. The British economy is impossible to run any more and they will be left with an almighty mess to clear up runs the argument. But hold on. That is crazy. In fact, there is a very simple solution. Just appoint a Brexiteer.

On the original schedule, Brexit was meant to have been wrapped up by the time Carney left next year. But that doesn’t look likely any more. We might have crashed out with no deal, we might have decided to stay, Theresa May might still be plugging away valiantly with the 38


meaningful vote on her deal, or we might have simply resolved to never mention the whole thing ever again. Who knows? It’s anyone’s guess what might happen.

On one level, the challenge of appointing a new Governor in those circumstances is easy to understand. A central bank already has plenty of uncertainty to cope with even in the best of times. But Brexit ramps it up to a whole new level: if they are being honest, no one has any idea what its impact might be or even whether it is going to happen. There aren’t any econometric models that tell you how monetary policy should respond to that.

On another level, however, it is completely crackers. The problem only arises because the Chancellor is looking in the familiar pool of Davos-friendly technocrats. In the FT, the names tipped are drearily familiar. The head of the Financial Conduct Authority. A former chief economist of the IMF. One of the career staffers, or maybe a Professor from somewhere or other. From that perspective, Brexit is a problem to be managed. Sterling will crash, investment will dry up, wages will rise, and exports will collapse. The Bank will be muddling its way through one disaster after another.

But surely the Chancellor could just appoint a Brexiteer? To someone who actually believes in it, leaving the EU is an opportunity not a crisis in the making. It is a chance to rebalance the UK economy. Real wages should start to rise again. The trade deficit might come under control. The City will become less dominant, and the regions might have a chance to thrive.

Once you widen the search, there is no shortage of potential candidates. From industry, Sir Simon Wolfson of Next would be perfectly well-qualified. From the City, Peter Hargreaves, the founder of Hargreaves Lansdown could do the job. Or, of course, the Chancellor could simply re-appoint a still energetic Mervyn King. Any of them would surely do a better job than another globe-trotting professional central banker such as Carney. It remains to be seen whether we actually leave the EU – but if we do, it might be an idea to have a Governor of the Bank of England who actually believes in it.