Bank of England chief Mark Carney will serve an additional seven months as governor, staying until the end of January 2020 to help support the Brexit transition, the government and the central bank said Tuesday.
Though the extension is shorter than expected - most were predicting Carney would carry on for another year - the decision does help reduce one of the immediate uncertainties surrounding Brexit.
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Hammond also confirmed that Carney, who said last week he was prepared to stay in his job beyond next June when his term was due to end, had agreed to remain until 2020.
Mark Carney is to remain in his role as governor of the Bank of England until 2020, it has been announced.
Last month he warned that the risk of a "no deal" divorce with the European Union was "uncomfortably high" and "highly undesirable".
Labour MP Virendra Sharma, a champion of the anti-Brexit campaign group Better for Britain, said Carney's willingness to stay through the turbulence "shows the problems that the government are having on Brexit".
Carney said in a letter to Hammond: "I recognise that during this critical period, it is important that everyone does everything they can to support a smooth and successful Brexit". "Whoever would take over, had they taken over in June next year, or now its going to be January 2020, would be looking at a very gradual policy normalization, subject to the negotiations in terms of our relationship with the European Union".
Carney has already extended his term once at the Bank in a move to ensure continuity through the Brexit negotiations.
"A governor who was leaving at the end of June, with his bags already packed, would be in a poor position to represent the United Kingdom in what might be some quite critical - and time critical - negotiations over that period".