British PM Theresa May backs Bank of England chief Mark Carney

British Prime Minister Theresa May has thrown her weight behind Bank of England governor Mark Carney.
British Prime Minister Theresa May has thrown her weight behind Bank of England governor Mark Carney. PHOTO: REUTERS

LONDON (AFP) - British Prime Minister Theresa May on Monday threw her weight behind Bank of England governor Mark Carney, who faces intense speculation over his future.

Carney began his tenure in 2013, stressing his intention to serve only five years of an eight-year term for personal reasons, meaning he would step down in 2018.

But in late 2015, the Canadian refused to rule out staying for the full eight years in the run-up to the Brexit referendum.

May's intervention came as media was divided over Carney's fate - with competing claims over whether he was set to announce his departure amid tensions following Britain's June 23 vote in favour of exiting the European Union.

All eyes will now be on Carney, 51, this Thursday, when he will present the central bank's latest interest rate announcement alongside its latest quarterly forecasts for economic growth and inflation.

"The prime minister has been clear in her support for the governor, the work he is doing for the country," May's official spokeswoman told reporters on Monday.

"It's clearly a decision for him but the prime minister would certainly be supportive of him going on beyond his five years." The premier regards him as "absolutely" the right person for the job, she added.

British paper The Sunday Times, citing senior figures who had worked closely with the governor, reported that he was "disillusioned" with May's Conservative government and criticism over his stance since the Brexit vote on June 23.

The Financial Times, however, said he was "ready" to serve a full eight-year term, reporting that Carney had told friends he was readying a statement.

"The prime minister has always had a good working relationship with the governor of the Bank of England and intends to continue that," added May's spokeswoman on Monday.

"She recognises the work that he's been doing for the country and supports that, while recognising it's also a decision for him.

"She's fully supportive of the work that he has done as is doing for the country."

A Bank of England spokesman told AFP on Monday that "nothing has changed", adding Carney's decision over whether to stay will be made public by the end of the year.

Under Carney's leadership, the BoE had warned repeatedly over the potential impact of Britain's potential departure from the European Union.

The central bank had argued in July that Britain could fall into recession as businesses delay investment decisions because of the shock June 23 referendum vote to exit the EU.

May had stoked speculation in October at the Conservative party's annual conference, when she argued the BoE's ultra-loose monetary policy under Carney had hurt the poor and helped the rich.

Added to the picture, last week Carney said any decision on the length of his term would be "entirely personal", saying "no one should read anything into that decision about government policy". He has previously stated his desire to return to Canada for the education of his four daughters.

Meanwhile on Monday, Carney held talks with the prime minister, but officials were quick to point out that the meeting had been scheduled for some time.

The governor gave no response to reporters' questions about his future as he arrived and then left 10 Downing Street.