Bank chief defends pay and perks

Bank of England governor-in-waiting Mark Carney yesterday insisted his more than £800,000-a-year pay and perks package was “equivalent” to that of outgoing boss Sir Mervyn King.

In his first hearing with MPs ahead of taking up the job in July, Mr Carney defended his pay deal – which includes a £250,000 housing allowance – as being in line with that of Sir Mervyn on a “pay and pension” basis.

But MPs on the Treasury Select Committee questioned whether he was concerned about “resentment” among Bank of England staff, given that their pay has been frozen for two years.

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Mr Carney, currently governor of the Bank of Canada, will be paid the accommodation allowance on top of a £480,000 salary, well above the £305,000 pay level of Sir Mervyn. “I’m moving from one of the least expensive capital cities in the world – Ottawa – to one of the most expensive capital cities in the world,” he added.

Mr Carney said it was important that monetary policy is “reviewed periodically”, saying that in Canada it was done every five years.

But he insisted he had not looked at whether UK monetary policy should be altered and that any decisions in that area would be for the Government. In his written evidence to the committee, he said: “In any possible review, it would be vital to recognise that long and varied experience demonstrates that delivering price stability is the best contribution that monetary policy can make to the economic welfare of citizens.”