Looming election set to delay appointment of Bank of England governor

The appointment of the next Bank of England governor is set to be pushed back until after the forthcoming election, and Mark Carney could be asked to extend his term in the event of Brexit being delayed again, according to people briefed on the matter.

Ministers look increasingly unlikely to hit the government’s deadline of making an announcement on Mr Carney’s successor this autumn.

One Whitehall official said the process of choosing the next BoE governor was going “very slowly” and an expected election in November or December made it likely a decision would not be made until a new government was in place.

Two officials said that if Brexit was delayed beyond October 31 then the Treasury might ask Mr Carney to extend his term, which is due to end on January 31.

A panel of senior civil servants plus an independent member has sent the Treasury a shortlist of candidates to be the next BoE governor after holding interviews with applicants over the summer.

The shortlist, which did not rank the candidates, is thought to include Shriti Vadera, chair of Santander UK; Andrew Bailey, chief executive of the Financial Conduct Authority; Minouche Shafik, head of the London School of Economics; and Ben Broadbent and Jon Cunliffe, both deputy governors at the BoE.

A sensible candidate in good standing would be very reluctant to take the job in these circumstances

The shortlist did not include Gerard Lyons, a Eurosceptic economist and former adviser to Boris Johnson when he was London mayor, who applied for the role.

John Kingman, the chair of Legal & General who has been repeatedly linked with the BoE governorship, said on Tuesday he had not applied and was not interested in the job.

The government is heavily focused on trying to secure Brexit on October 31, and people briefed on the matter said ministers did not want to make a decision on Mr Carney’s successor until it was clear whether the UK was leaving with or without a deal, because this would have a significant influence on the choice of candidate.

People with past government experience also said no serious candidate to be BoE governor would agree to be appointed just as an election is looming.

Jill Rutter, a former civil servant who has worked in Downing Street and the Treasury, said: “A sensible candidate in good standing would be very reluctant to take the job in these circumstances.”

Ministers have little time left in which to take a decision on Mr Carney’s successor before an election.

Opposition parties have indicated they would back Mr Johnson’s push to hold an election once they believe the risk of a no-deal Brexit on October 31 has been averted, meaning that a poll could take place in November or December.

Ministers have said they would make the announcement about Mr Carney’s successor to parliament, which is due to reconvene on October 14 after a five week suspension, and sensitive government appointments are usually avoided in an election campaign.

If chancellor Sajid Javid tried to announce a new BoE governor in October, he would run the risk that after an election a new government might seek to overturn the decision.

Kate Barker, the independent member of the panel that produced the shortlist of people to succeed Mr Carney, said these considerations alongside the eight year term for the BoE governor meant the successful candidate needed to be “politically sensitive”.

The candidate “cannot set themselves up in opposition to the government”, she added.

A law passed by parliament this month seeks to push Brexit back to January 31 if Mr Johnson is unable to finalise a new withdrawal agreement at an EU leaders’ summit on October 17-18, although the prime minister insists the UK must leave the bloc on Halloween.

Should Brexit be pushed back to January 31, government officials are considering asking Mr Carney to remain in post a little longer.

Mr Carney did not rule out this possibility when he appeared before the Commons Treasury select committee this month.

“As you know, I have extended twice in order to facilitate a smooth [succession],” he told MPs, adding that only one of two necessary conditions for a successful handover had already been met.

The financial system was ready for Brexit, he said, but the “transition to a successor . . . remains to be filled”.

Mr Bailey, Mr Broadbent and Mr Lyons declined to comment. The other candidates to be BoE governor did not immediately respond to requests for comment.

The Treasury and the BoE declined to comment.