Government urged to act on Mark Carney's offer to extend Bank of England service - as it happened

The Treasury committee is questioning BoE governor Mark Carney about the UK economy, and his own future

• Latest: Government urged to take decision soon
• BREAKING: Carney says he could serve longer term
• Governor could steer BoE though Brexit aftermath
• Discussions underway with chancellor about staying longer
• Could Carney work for PM Johnson, or Rees-Mogg?

6.00pm BST

Time for a recap:

I am willing to do whatever else I can in order to promote both a smooth Brexit and effective transition at the Bank of England.

The chancellor and I have discussed this. I would expect an announcement to be made in due course."

"It's likely that the real income squeeze will return for households across the country."

"You can't avoid that medium-term impact on real incomes."

Q: how much did the pound strengthen after Mark Carney said he'd stay on as Governor?
A: erm, actually it weakened pic.twitter.com/0FZOx6j3zp

5.32pm BST

Another central banker, Alan Greenspan, once remarked that "If I seem unduly clear to you, you must have misunderstood what I said."

Mark Carney has hacked back to that particular Greenspan doctrine at times over the last five years.

As ever with @bankofengland there's interpretation required with Mark Carney's words.He's willing to do "whatever else I can...to promote a smooth Brexit" but does that mean stay on a bit longer or another year? Fact @hmtreasury hasn't announced anything could suggest the former?

Either way Mark Carney hasn't said no, which will be reassuring to many. Likely they are still finalising the details. But these announcements usually happen the same day so slightly odd.

4.48pm BST

Back in the financial markets, Amazon just hit a $1trn market capitalisation.

Amazon's share price rose over the 'magic' figure of $2050.27, making it the second US company - after Apple - to be worth $1,000,000,000,000.

Amazon becomes world's second $1tn company https://t.co/aFplaV2o8T

Amazon market cap milestones:

Sep 2018: $1 trillion
Oct 2017: $500 billion
Jun 2012: $100 billion
Oct 2009: $50 billion
Nov 1998: $10 billion
Sep 1997: $1 billion

4.14pm BST

The Treasury committee hearing has wrapped up.

And across the road in Westminster, Theresa May's spokeswoman has confirmed that an announcement on Mark Carney's future is being worked on.

British Prime Minister Theresa May thinks Mark Carney has done a good job as governor of the Bank of England, her spokeswoman said on Tuesday, adding that there would be further announcements on the matter.

"The prime minister obviously thinks he has done a good job in his time as governor, and there will be more to say on that in due course," the spokeswoman told reporters.

3.37pm BST

Nicky Morgan MP, Chair of the Treasury Committee, has urged the Treasury to make a decision about Mark Carney's future soon - and press on with finding his successor too.

She says:

"In his evidence session with the Treasury Committee today, Mark Carney indicated that he is willing to stay as Governor of the Bank of England beyond June 2019 if it would assist the Government.

"Stability is vital during this important period. The sooner the Government provides clarity, the better. Any extension to Dr Carney's term should not be used to delay succession planning."

3.35pm BST

John Mann MP then asks BoE chief economist Andy Haldane how he'd deliver on Labour's policy to make the Bank boost UK productivity.

Under this plan, the BoE would be set a new 3% productivity growth target (alongside its 2% inflation goal)

We wouldn't have the tools, Mr Mann, to achieve it.

Finally Haldane says central banks do not build roads etc

He doesn't confront the question

Carney steps in and says we would have greater responsibility not power.

Again, truth is an honest MPC would have to resign because they're being asked to deliver the impossible

Unclear whether John Mann thinks his party's policy is nuts, which is the genius of the question

3.21pm BST

John Mann MP asks Carney if he'd still want to be Bank of England governor if Boris Johnson or Jacob Rees-Mogg were prime minister in June 2019.

Carney suggests that this wouldn't put him off.

These jobs are technocratic jobs. You serve the remit set by parliament and the government of the day.

3.18pm BST

A former Bank of England policymaker, Andrew Sentance, has criticised the whole circus around Mark Carney's future.

Today's session follows days of speculation about whether the Treasury and the Bank were trying to hammer out an agreement to keep the governor for longer.

"It seems like the appointment of the governor is something that is happening between the Chancellor and the governor, and is not happening in a transparent way.

"It seems an awful lot is happening in this appointment process behind the scenes and that is not good in terms of the independence of the Bank of England."

3.06pm BST

Treasury committee member Wes Streeting has welcomed Mark Carney's offer to stay on longer, and hopes an announcement comes soon.

Mark Carney confirms to @CommonsTreasury that he is in discussions with Treasury about extending his term beyond his anticipated departure date in June 2019. Makes sense, in my view, in light of Brexit and the sooner we have clarity on this the better.

2.54pm BST

Ed Conway of Sky News suspects that Carney could actually extend his governorship to 2021, rather than leaving in June 2019 as currently planned.

That would mean a full eight-year stint (he started in summer 2013) - the standard term for BoE governors.

Breaking: Mark Carney signals he will extend his tenancy through the Brexit transition.
"I am willing to do whatever else I can to promote a smooth Brexit & effective transition... The Chancellor and I have discussed this. I would expect an announcement to be made in due course."

The fact that Carney emphasised he is willing to stay on for the Brexit transition implies he might indeed stay until the originally-intended end of his term: mid 2021. So another two years rather than one

Chances of a hard Brexit, as far as market is concerned, have risen from 1 in 5 to 1 in 4 according to BoE chief economist Andy Haldane

Moments after signalling he's staying on as Governor, Mark Carney reminds Brexiteers why he so infuriates them, warning that a no deal Brexit would mean a return of the real income squeeze. And warns that the BoE may even have to RAISE interest rates if there's a hard Brexit

2.50pm BST

Q: How vulnerable is sterling to a sudden devaluation?

Mark Carney takes a 'glass half-full' approach. He thinks the pound is currently suffering from the risk of a no-deal Brexit, so it might rise if an agreement and a transition deal is reached.

2.45pm BST

Quilter Investors head of investment, Anthony Gillham, believes the UK government should accept Mark Carney's offer to stay longer at the Bank of England.

Gillham concedes that Carney hasn't be "universally popular" (particularly with Leave supporters, who have hated his warnings about Brexit).

"Central banks have done a lot of heavy lifting over the last decade in an effort to restore economic stability, although they have often been required to swim upstream against a current of destabilising political uncertainty. As if to illustrate the point, despite the Bank of England's efforts to protect sterling over the summer, we have seen the pound chasing up positive sentiment around Brexit, before following it back down when the political rhetoric changes.

"If Mark Carney's tenure is extended he will have his work cut out, but the case for an experienced captain to guide the UK through dangerous waters has grown stronger as Brexit negotiations have dragged on. He will install a measure of certainty on monetary policy, which provides some air cover through what will surely be an unpredictable spell. As Bank of England governor Mark Carney hasn't always been universally popular, but appointing him as temporary caretaker through this period of transition does make sense."

2.35pm BST

The Treasury have declined to comment on Mark Carney's comments today, but have confirmed that an announcement will come in due course.

2.32pm BST

The committee have moved away from Mark Carney's future, and onto the impact of artificial intelligence on the UK economy (are they suggesting the governor could be replaced by a robot?).

2.24pm BST

Here's our news story on governor Carney's pledge to help Britain through Brexit by serving longer at the Bank of England:

Mark Carney has confirmed he is in talks with the Treasury over staying on at the Bank of England to smooth any potential fallout from Brexit.

Dropping the broadest possible hint he could remain at Threadneedle Street beyond his scheduled departure date in June, the Bank of England governor said: "Even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and an effective transition at the Bank of England."

Related: Mark Carney hints he is willing to stay on at Bank of England

2.16pm BST

Charlie Elphicke MP disputes the Bank's claim that food prices would surge if Britain left the EU without a deal next year.

Q: Couldn't the UK set its own tariffs, meaning cheaper food imports from countries outside the EU?

2.14pm BST

There's not much reaction in the financial markets to Mark Carney's offer to serve longer at the Bank of England.

The pound is still down 0.25% against the US dollar today, at $1.284.

Curious that sterling #GBP has barely budged since #BoE gov Carney announced his willingness to stay on in the role past next summer pic.twitter.com/4HlZ7FfS6q

2.09pm BST

Mary Carney weighs in too -- he says that it is unlikely that Britain would leave the EU without a deal or a transition deal in March.

But if that unlikely scenario does happen, the Bank would do what it could to mitigate the impact on UK real incomes, the governor says.

2.05pm BST

The Treasury committee are now quizzing the Bank about the impact of a no-deal Brexit on the UK economy.

What might happen to food prices and the cost of living if we reach March 2019 without a deal between the UK and the EU, and both sides walk away?

1.55pm BST

Carney is asked about his warning last month that a no-deal Brexit is an "uncomfortably high" risk.

Q: Does that mean that it's now a 60:40 chance? [as trade secretary Liam Fox claimed].

1.50pm BST

Mark Carney is also asked about the resignation of TSB chief executive Paul Pester this morning, following its IT meltdown.

He replies that senior managers must "absolutely" take responsibility for failures on their watch - be they conduct, operational or financial.

1.45pm BST

Q: Has the governor given any thought to who might (eventually) succeed him?

Mark Carney declines to suggest a shortlist, saying only that there are "many qualified candidates".

1.42pm BST

Some snap reaction to Mark Carney's comments:

The interesting thing here is that he has made the offer to stay on, but @hmtreasury hasn't accepted it yet https://t.co/kGFfyOnsmz

Looks that #Carney will extend #BOE term. When asked if will stay longer as Governor says I am willing to do whatever else I can to promote smooth #Brexit Have discussed it with #Chancellor & announcement will be made in due course

Carney hasn't explicitly said he's willing to stay on, but he also hasn't unequivocally ruled out it either. #gbp

1.35pm BST

Unfortunately, Mark Carney has declined to reveal his decision today - after all, it's the chancellor's decision to announce.

I've "made them aware of my willingness" to do what I can to help, he adds.

1.30pm BST

Treasury committee member Wes Streeting has welcomed Carney's comments.

Mark Carney confirms to @CommonsTreasury that he is in discussions with Treasury about extending his term beyond his anticipated departure date in June 2019. Makes sense, in my view, in light of Brexit and the sooner we have clarity on this the better.

1.22pm BST

Nicky Morgan begins the session by joking that today's session hasn't attracted much press attention -- and then reads out a stream of headlines about Mark Carney's future at the Bank of England.

Can he shed any light on whether he'd stay longer at the Bank?

Accordingly, even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and an effective transition at the Bank of England.

1.16pm BST

Parliament's Treasury committee has begun its hearing with Bank of England governor Mark Carney.

1.00pm BST

Joel Hills of ITV News reckons Mark Carney wasn't considering an an extra shift at the Bank of England two months ago.

On July 5th, during an interview in Newcastle, I asked Mark Carney if he would consider extending his term at @bankofengland. He looked 1) very surprised to be asked the question (so much so he didn't answer it) 2) completely unenthused by the idea.

12.18pm BST

Just an hour to wait until MPs on the Treasury committee grill Mark Carney about the possibility of extending his contract beyond June 2019.

Craig Erlam of City trading firm OANDA suggests the governor might refuse to be drawn about the issue today (he's officially there to discuss August's inflation report).

Carney's appearance before the Treasury Select Committee on Tuesday comes with an additional twist, following reports that the Treasury is trying to persuade him to extend his term - which ends in the middle of next year - by another 12 months. Carney has already agreed to one extension in order to oversee the Brexit process and the government is clearly hopeful that he will contemplate one more so as to provide some source of stability in otherwise uncertain times.

He hasn't been the most popular of Governors, primarily among Brexiteers, who are still angry about his predictions on the economy prior to the referendum in the event of a vote to leave.

11.59am BST

The Press Association have compiled a handy Q&A on the IT crisis at TSB.

Q: Why has TSB come under the spotlight?
A: Problems erupted following a migration of customer data from former owner Lloyds' IT system to a new one managed by TSB's current owner Sabadell.
Up to 1.9 million people using TSB's digital and mobile banking found themselves locked out of their bank accounts. Some customers were unable to access their cash or pay bills - while others reported being able to see other people's accounts.
The Information Commissioner's Office, which monitors data and privacy, previously said it was looking into the situation.
MPs on the Treasury Committee heard from the bank in April that 40,000 complaints were received over a 10-day period.

11.33am BST

Jonathan Reynolds MP, Labour's Shadow Treasury Minister, has also welcomed Paul Pester's exit, saying:

"TSB customers have suffered inexcusable levels of disruption and received service which has fallen far short of accepted standards. It is right that the most senior person at the bank has been held accountable for this.

"A decade on from the financial crisis, senior individuals taking responsibility in this way will be an essential building block of restoring public trust in our banking sector."

Related: TSB chief Paul Pester steps down after IT meltdown

11.12am BST

TSB have written to Treasury committee chair Nicky Morgan MP, confirming that Paul Pester has stepped down (three months after the committee said they'd lost confidence in him).

They may not have much confidence in Pester's replacement either; executive chairman Richard Meddings apparently thinks it's 2019!

The Committee remains concerned about the continuing problems at TSB, including unacceptable delays in compensating customers who have been badly let down. It is to be hoped that Dr Pester's successor is able to restore the confidence of the bank's long-suffering customers".

11.00am BST

South Africa's lurch into recession is a blow to new prime minister Cyril Ramaphosa, who succeeded Jacob Zuma earlier this year:

Ramaphosa Starts With a Recession, Just Like Zuma Nine Years Ago. @business #SouthAfrica $USDZAR pic.twitter.com/dkEy8rQaxQ

10.39am BST

Newsflash: South Africa has fallen into recession.

New figures show that the country's GDP shrank by 0.7% in the second quarter of 2018 - news which is sending currency into a fresh dive.

The South African #economy slipped into a #Recession as economic activity declined by 0,7% in Q2:2018 q/q after a 2,6% decline in Q1:2018 #StatsSA #GDP https://t.co/KjOdmHB0yN pic.twitter.com/aBnPccETmP

South African rand loses more ground against U.S. dollar after GDP data pic.twitter.com/jbJpN6t0ct

10.25am BST

Blane Perrotton, managing director of property consultancy and surveyors Naismiths, spies an "uneasy calm" in Britain's building sector.

Here's his take on drop in the UK construction PMI in August:

"Though levels of optimism have sagged, construction firms continue to hire, though this is likely to be driven by the need to get existing projects completed rather than a great bet on future demand.

"With Brexit storm clouds still looming on the horizon, the current modest progress is as much as can be expected - especially in the South East.

UK Construction #PMI Plunges to 52.9 in Aug. from 55.8 in July. A very surprising Decline, as Analysts expected 54.9. Now it is only 2.9 away from the 50 threshold. The indicator is historically a reliable predictor for future recession when it falls below 50 @graemewearden

"Recent results from contractors indicate some softness in civil engineering and sentiment here has not been helped by last week's announcement that Crossrail project is behind schedule.

"Yet even if the UK's current infrastructure pipeline may not be quite as bulging as some would hope, mega-projects like Heathrow, Hinkley Point and HS2 continue to offer quality work for firms right down the supply chain. Importantly, minds are focused on discipline, with anecdotal evidence that firms are holding prices during bidding negotiations.

9.50am BST

Growth in Britain's construction sector has hit a three-month low in August, a new survey shows.

Housebuilding growth slipped to its weakest rate since March, according to data firm Markit. That won't provide the new homes needed to tackle the UK housing shortage.

"The construction sector slipped back into a slower growth phase in August, with this summer's catch- up effect starting to unwind after projects were delayed by adverse weather at the start of 2018.

"Civil engineering was the worst performing area of the construction sector, with output in this category falling for the first time since March amid reports citing a lack of new work on infrastructure projects.

9.42am BST

The pound isn't the only currency under pressure today.

Indeed, the US dollar is strengthening across the board, bringing more pain to emerging markets such as South Africa and Indonesia.

USD marches on, Citi notes. The Dollar Index DXY is continuing to make new highs of the day at 95.52. As a consequence, there is not one currency trading in the green vs the USD. Euro is edging towards the lower end of the $1.15-1.1750 trading range. EM FX hit hardest. pic.twitter.com/I3V7GcSOIs

9.21am BST

Several senior economists are unimpressed by the swirling uncertainty over Mark Carney's future.

Professor Costas Milas of the University of Liverpool's management school, argues that the governor should pledge to stay until 2021. That would be the typical eight-year term, rather than Carney's planned six-year stint [ending in June 2019].

The rumour is that Mr Carney is considering a "Treasury request to serve another year as governor". This will make it a seven-year service at the bank rather than the eight-year service advertised by the Treasury back in 2012.

Assuming that the rumour is a fact, the Treasury is indeed correct in asking Mr Carney to continue as governor at the bank. A critical, yet unwritten, rule of football is never substituting a player - let alone your (monetary policy) captain - when defending a corner.

The charade called the appointment/reappointment of the Governor of the Bank of England continues. This unprofessional approach to a very senior position in the UK policy establishment is undermining the credibility and independence of the Bank of England. https://t.co/Gj0hjYiqdd

We should seriously question how independent the Bank of England is these days, when the appointment of the Governor becomes subject to the whims of politicians. https://t.co/W6Cu42jO6W

9.16am BST

In the City, the pound is dropping again as traders fret about Brexit....and the uncertainty at the Bank of England.

Sterling is down half a cent against the US dollar at $1.2825, having lost almost a cent on Monday.

Speculation over Mark Carney's future at the Bank of England, and the continued opposition to Theresa May's Chequers plan failed to help the pound recover Monday's losses as Tuesday got underway.

The problem isn't that Carney might stay on longer, but the fact he might not, his tenure as central bank chief set to end just after Britain officially leaves the EU. Combine this with the renewed attacks on May from Brexit hardliners and sterling couldn't really do anything positive after the bell.

8.50am BST

Despite the sometimes-shambolic state of TSB's service since April, it appears that Paul Pester could still pick up a bonus.

Here's the official line:

Paul will be paid in line with the bank's remuneration policy and the terms of his contract.

The release of variable pay will take into account the outcome of performance conditions as well as ongoing regulatory and independent investigations.

8.40am BST

Wes Streeting MP, another member of the Treasury committee, thinks Paul Pester's departure hasn't come fast enough .

The Board should have agreed with the @CommonsTreasury committee months ago. That was the right time for Mr Pester to step down. Questions remain of them and Sabadell. They will not escape thorough scrutiny in due course on behalf of their customers - including former customers. https://t.co/lf3WjLbIdi

8.27am BST

Alison McGovern MP reminds us that the Treasury committee asked TSB to consider Pester's position three months ago.

@CommonsTreasury letter of 7 June on Paul Pester's role at TSB pic.twitter.com/Tx0wReVc4f

TSB announces that CEO Paul Pester is stepping down, but given the state of its IT system it's surprising that it managed to get the email out. pic.twitter.com/6fZ23Tkl8T

8.18am BST

Paul Pester's departure comes five months after TSB suffered one of the worst IT crises in years, when a technology migration was botched, leaving thousands of customers unable to access their accounts.

Pester was roasted by MPs over his handling of the crisis; his future has been in doubt since June when the Treasury Committee said they had "lost confidence' in him.

Related: TSB apologises for fresh disruption to online services

8.16am BST

Breaking: Paul Pester, the boss of TSB, has resigned - as the bank is struck by ANOTHER tech meltdown.

The Board of TSB Bank Plc has today announced that after 7 years as CEO, Paul Pester will be stepping down from his position and leaving the company.

Richard Meddings, current Non Executive Chairman of TSB, will take on the role of Executive Chairman with immediate effect in order to enable a full public search to commence for a new CEO.

8.08am BST

Conservative MP George Freeman has also called on Mark Carney to stay longer at the Bank, saying:

"We need a Brexit that doesn't damage business confidence, investment and jobs.

Mark Carney is the Alex Ferguson of the City - if he'll do it he would be a smart pick."

7.59am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

"It wouldn't be a surprise at all if a member would ask [about Carney's future].

Carney has done a very good job in what, in many cases, have been very difficult economic circumstances. There would be a lot of merit in the chancellor asking him to extend his term should that be the decision the chancellor were to take.

Related: Mark Carney to face MPs' questions over future at Bank of England