Philip Hammond has spent many idle moments thinking about who should succeed Bank of England governor Mark Carney. How, the chancellor asks himself, can he repeat the stunning, rabbit-out-of-a-hat moment when No 11’s previous incumbent, George Osborne, said in 2013 that the Canadian central banker who was heading the global post-crash clean-up operation was coming to help Britain’s laboured recovery?
Carney is due to step down next June and has said the date is fixed in his diary after already extending his stay by a year to steer the Bank through Brexit and out the other side.
It is a decision that has consolidated his reputation as one of the few senior policymakers taking measured decisions in the national interest rather than the narrow party interest that dominates parliament. So it’s a tall order finding a replacement.
Formally, the process is not supposed to begin for a month. None the less, questions are already being asked about possible candidates.
Before the financial crash, the list of contenders was usually drawn from internal candidates and technical knowledge was the most important item on their CV. In 2019 the appointment will be a politically charged affair that may call into question the independence of the central bank – not least because the winner will be seen by some as a Treasury patsy, willing to implement a policy of cheap money to offset almost perpetual austerity.
Sarah Hewin, chief European economist at Standard Chartered, says the excitement of taking on a multi-layered job that marries monetary policy with a watchdog role over the entire financial services sector will prove attractive to many candidates.
David Blanchflower, a member of the Bank’s rate-setting committee in the years around the financial crash, says Brexit uncertainty and political instability make it a poisoned chalice. It will take a large bag of money to get the best person, he says.