Mark Carney will get his first chance to show how he plans to fix the country’s stagnant economy later today, with expectations running high that the Canadian is set on change at the Bank of England.
Mr Carney, the first foreigner to run the bank in its 318-year history, faces a three hour question-and-answer session with lawmakers that could also signal how he will bring his banking expertise to bear on Britain’s crisis-hit banks.
After taking over at the Bank of Canada in 2008, Mr Carney earned a reputation for successfully protecting his home country from the global financial crisis and he now faces the bigger challenge of getting Britain out of a rut of almost zero growth.
His new boss, finance minister George Osborne, hailed the 47 year-old former Goldman Sachs banker as “the outstanding central banker of his generation” when he made the surprise announcement in November.
Since then, Mr Carney’s various comments on policy have been seized upon as signals of what he plans to do when he takes over at the Bank of England on July 1, although he will be only one of nine interest rate setters.
“I think there will be quite a few changes,” said Michael Saunders, an economist at Citi, such as a more flexible inflation target, setting clear signals on how long interest rates may remain low, more bond-buying and, possibly, a rate cut.
Mr Carney promised to keep Canadian rates near zero for about a year in April 2009 as the global crisis intensified, before the idea was taken up by the US Federal Reserve.
That kind of approach has raised eyebrows at the Bank of England. Several top officials have said it is not needed for Britain, in part because of concerns it could stoke the country’s persistently above-target inflation.