Britain is expected to choose a new central bank chief this year to succeed Canadian Mark Carney, who will step down in June 2019, three months after the country’s scheduled exit from the European Union, writes William Schomberg.
ANDREW BAILEY - the outsider insider
Widely tipped by analysts as Carney’s most likely successor, Bailey reached the role of deputy governor of the BoE with a focus on banks before becoming chief executive of the Financial Conduct Authority, a financial markets regulator.
During his time at the BoE, Bailey helped to steer Britain’s banks through the global financial crisis, enhancing his reputation as a safe pair of hands.
However, heading the FCA - which roots out misconduct in Britain’s large financial services sector - is fraught with risks. The head of the British parliament’s influential Treasury Committee has criticised Bailey for withholding parts of a report into alleged misconduct by state-owned RBS during the financial crisis. Bailey has cited privacy restrictions.
Bailey acknowledged the speculation about a move to the BoE in an interview published this week. “You’ll be unsurprised to know this question comes up reasonably often,” Bailey told Financial News. “But I’ve got a job and, I have to be honest with you, I have never spent my time thinking about the one I want to do next.”
BEN BROADBENT AND DAVE RAMSDEN - the deputies
Broadbent and Ramsden are deputy governors for monetary policy and for markets and banking respectively, burnishing their credentials as potential successors to Carney.
Broadbent, a former Goldman Sachs economist who once trained as a classical pianist, is respected for his economic analysis but has less experience on banking oversight, which has become an important part of the BoE governor’s role.
Ramsden only joined the central bank in September although he is no stranger to the Monetary Policy Committee having attended 92 of its meetings in his previous role as the Treasury’s chief economic advisor.
The two other BoE deputy governors, Jon Cunliffe and Sam Woods, are less likely contenders. Woods focuses mostly on bank regulation while Cunliffe - a former British ambassador to the EU - would be aged 66 at the start of the term which usually runs for eight years, although Carney has chosen to step down after six.
ANDY HALDANE - the free thinker
The BoE’s chief economist, Haldane has developed a reputation for floating unconventional ideas, including the abolition of cash as a way to give central banks more muscle over the economies they run. In 2012, he praised the anti-capitalist Occupy movement for suggesting new ways to fix the shortcomings of global finance. Haldane has experience of both sides of the Bank, having served previously as executive director for financial stability, overseeing the risks to the economy from the banking system. But he might be seen as too much of a maverick to take the job of governor.
The announcement of Carney, the first non-British governor of the BoE in more than three centuries, was a surprise. Should finance minister Philip Hammond also opt for a less obvious candidate, one name that has appeared in Britain’s media is that of Sharon White, the head of a telecoms regulator and who previously worked at the Treasury. The daughter of Jamaican immigrants, she has won wide praise for her high-profile roles in the public sector. Another outside contender would be Adair Turner, a former chairman of a now defunct financial services regulator who was in the running last time around. He continues to speak about the British economy and has warned of the risks from high debt levels.
A Labour Party governor?
The prospect of the left-wing Labour Party taking power in the next year or so is remote but investors are mindful that Prime Minister Theresa May has only a small majority in parliament after last year’s failed election gamble and her Conservative Party is split over how to leave the European Union. Labour leader Jeremy Corbyn and his would-be finance minister John McDonnell are socialists and have in the past proposed that the BoE should fund investment in infrastructure, a big change from its current focus on inflation. If they were to pick the next BoE governor, Ben Seager-Scott, chief investment strategist at Tilney Group, an investment firm, said they might consider former members of an economic advisory committee which included US academic and Nobel Prize winner Joseph Stiglitz and Ann Pettifor, a British economist who is an austerity critic.
Ex-EU Brexit negotiator Barnier: UK reputation at stake in Brexit row
Michel Barnier, the European Union's former Brexit negotiator, said on Monday (14 June) that the reputation of the United Kingdom was at stake regarding tensions over Brexit.
EU politicians have accused British Prime Minister Boris Johnson of not respecting engagements made regarding Brexit. Growing tensions between Britain and the EU threatened to overshadow the Group of Seven summit on Sunday, with London accusing France of "offensive" remarks that Northern Ireland was not part of the UK. Read more
"The United Kingdom needs to pay attention to its reputation," Barnier told France Info radio. "I want Mr Johnson to respect his signature," he added.
Germany’s Merkel urges pragmatic approach to Northern Ireland
German Chancellor Angela Merkel (pictured) called on Saturday for a “pragmatic solution” to disagreements over part of the Brexit deal that covers border issues with Northern Ireland, Reuters Read more.
Prime Minister Boris Johnson said Britain will do "whatever it takes" to protect its territorial integrity in a trade dispute with the European Union, threatening emergency measures if no solution was found.
The EU has to defend its common market, Merkel said, but on technical questions there could be a way forward in the dispute, she told a news conference during a Group of Seven leaders' summit.
"I have said that I favour a pragmatic solution for contractual agreements, because a cordial relationship is of utmost significance for Britain and the European Union," she said.
Referring to a conversation she had with U.S. President Joe Biden about geopolitical issues, Merkel said they agreed that Ukraine must continue to remain a transit country for Russian natural gas once Moscow completes the controversial Nord Stream 2 gas pipeline under the Baltic Sea.
The $11 billion pipeline will carry gas to Germany directly, something Washington fears could undermine Ukraine and increase Russia's influence over Europe.
Biden and Merkel are due to meet in Washington on July 15, and the strain on bilateral ties caused by the project will be on the agenda.
The G7 sought on Saturday to counter China's growing influence by offering developing nations an infrastructure plan that would rival President Xi Jinping's multi-trillion-dollar Belt and Road initiative. L5N2NU045
Asked about the plan, Merkel said the G7 was not yet ready to specify how much financing could be made available.
“Our financing instruments often are not as quickly available as developing countries need them,” she said
Macron offers UK's Johnson 'Le reset' if he keeps his Brexit word
French President Emmanuel Macron offered on Saturday (12 June) to reset relations with Britain as long as Prime Minister Boris Johnson stands by the Brexit divorce deal he signed with the European Union, writes Michel Rose.
Since Britain completed its exit from the EU late last year, relations with the bloc and particularly France have soured, with Macron becoming the most vocal critic of London's refusal to honour the terms of part of its Brexit deal.
At a meeting at the Group of Seven rich nations in southwestern England, Macron told Johnson the two countries had common interests, but that ties could improve only if Johnson kept his word on Brexit, a source said.
"The president told Boris Johnson there needed to be a reset of the Franco-British relationship," the source, who spoke on condition of anonymity, said.
"This can happen provided that he keeps his word with the Europeans," the source said, adding that Macron spoke in English to Johnson.
The Elysee Palace said that France and Britain shared a common vision and common interests on many global issues and "a shared approach to transatlantic policy".
Johnson will meet German Chancellor Angela Merkel later on Saturday, where she could also raise the dispute over a part of the EU divorce deal that is called the Northern Ireland Protocol.
The British leader, who is hosting the G7 meeting, wants the summit to focus on global issues, but has stood his ground on trade with Northern Ireland, calling on the EU to be more flexible in its approach to easing trade to the province from Britain.
The protocol aims to keep the province, which borders EU member Ireland, in both the United Kingdom's customs territory and the EU's single market. But London says the protocol is unsustainable in its current form because of the disruption it has caused to supplies of everyday goods to Northern Ireland.
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