Hogg Roasted

Mark Carney's chosen deputy was no sooner in than out

Another bad day at the Bank for Mark Carney. Now it’s his newly chosen, swiftly promoted deputy — no sooner in than out. Was it for this that he crossed the ocean and came to Threadneedle Street?

At the Bank of Canada in the worldwide banking crisis, he had made his name — perhaps not so arduous, so Mervyn King murmured, in a country with only five banks. Impressed, and willing to impress, George Osborne brought Carney in as King’s successor, to govern the Bank of England on a lavishly tailor-made contract, and to stay for five years. By then, it was said, Canada might need a new prime minister.

Carney arrived as a new broom, to sweep out the old guard. For three centuries the Bank had got along with one Deputy Governor at a time, but Carney chose four — plus a chief operating officer, Charlotte Hogg, who ranked with them. Diversity was her cause; the Bank, she believed, should have fewer middle-class chaps and, of course, more women.

The new-style Bank, Carney promised, would not make mysteries, but would tell the markets what to expect. Forward guidance, he called this. Unhappily, the guidance was overtaken by events so often as to become a byword, or even a counter-indicator. Carney’s most vocal guidance came last summer, before the referendum, when he warned that a vote to leave would poleaxe the markets. This may have chimed with Osborne’s “Project Fear” campaign, but it wasn’t what happened.

Then came Charlotte Hogg’s rise and fall. She was given a new job, as Deputy Governor for banking and markets, along with her old one. The City took this as a tip, and bet on her to be Carney’s successor, as the Bank’s first Governess. But she had failed to declare a family connection — a brother in Barclays with a grand title, though not a very grand job. The betting turned turtle. The favourite was scratched.

As for Carney, his term as Governor has passed the halfway stage, and there is now no obvious vacancy for him to fill in Ottawa. Early betting on his successor in Threadneedle Street points to a senior member of the Bank’s old guard.  

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