Carney delays Bank of England exit by bare minimum

GBP to AUD breakout ahead

Sterling has climbed 1.2 percent this week, boosted on Monday by news that Bank of England Governor Mark Carney will extend his tenure to 2019.

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.

It means that Carney will cover the full two-year period of Britain's Brexit negotiations, if Theresa May stands by her pledge to trigger Article 50 by the end of March next year.

At the same time, many pro-Brexit voices criticize Carney for his positions on Brexit and its fallout. Conservative MEP Daniel Hannan has been a particularly harsh critic, repeatedly calling for Carney's resignation in recent days.

Nor has he especially enjoyed the barrage of attacks to which he's been subjected from senior Tories, from the former chancellor Nigel Lawson to the eloquent maverick backbencher Jacob Rees-Mogg.

Most of his critics feel he was too supportive of the Remain campaign prior to the European Union referendum, and has politicised a role that is supposed to be purely technocratic.

Carney is expected to make his announcement on his decision on Thursday during a news conference after the central bank releases its publication of the Bank's Quarterly Inflation Report as well as the organization's results regarding its latest interest rate meeting.

He also expressed some doubt over the governor's extension to June 2019 meaning that he would still be around by the completion of Article 50 talks to exit the EU.

Kathleen Brooks, research director at City Index, said: "The markets are breathing a collective sigh of relief that Carney has extended his term, after all, if he extended it once, could he do so again?"

But most analysts argued that the fact that Carney was staying for a sixth year proved the opposite.

"The bigger question now is can they get someone of a similar calibre in the seat", said Timothy Graf, head of macro strategy for Europe, the Middle East and Africa with U.S. bank State Street.

When he took up the post in 2013, it was agreed that Mr Carney would serve an initial five-year term with the option of another three years. "As testified to Parliament, that intention was driven by personal, family considerations", he wrote to Mr Hammond. Five years of service would also coincide with my maximum term as Chair of the Financial Stability Board.

Following a meeting with the Prime Minister today he announced he has agreed to stay on an extra year until Brexit negotiations with the European Union had ended. During these months, he will be helping to secure a transition that is orderly and maintain a good relationship between the United Kingdom and EU.

Thank you for your letter of 31 October.

In his reply to the governor's letter, Hammond said he was "very pleased" with his decision to stay until 2019.

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