This morning the Ex-Bank of Canada Governor begins his role as the new Bank of England Governor, taking over from Sir Mervyn King. Carney is the first foreign national to hold the senior post on Threadneedle Street, and many are hoping he will be able to work miracles.
The UK economy is just beginning to show the green shoots of a recovery following a deeper recession than previously thought according to the ONS. The BoE has attempted to reignited growth with ultra-loose monetary policy a combination of a record low base rate and its £375bn asset purchases (QE).
Carney born in a remote part of Canada graduated from Harvard and has a doctorate in Economics from Oxford, has seen a rapid rise to head the BoE. His career highlights are having spent two spells with investment bank Goldman Sachs and in public roles, holding the top post at the Bank of Canada.
Widely quoted, Chancellor George Osborne called Carney “the outstanding central banker of his generation”.
The City has known of Carney’s appointment for some time and analysts are eagerly trying to second guess what he will do. It is important to note that Carney did guide Canada through the global recession, however the Canadian banking system was in a much better position than its UK counterpart to begin with. The BoE has few tools left to help reignite the UK economy, with Carney’s predecessor King, regularly highlighting the impact that the European crisis has had.
Ex-MPC member Prof. Blanchflower has been quoted by the BBC as saying “In a way, he has been given something of a poisoned chalice," says Prof Blanchflower. "The economy is not in recovery, it is not healing, it is not [even] out of intensive care."
All eyes will be on his first MPC meeting this week and the subsequent minutes when they are released to see how he intends on moving forward.