Bank boss Carney leaving successor a ‘poisoned chalice’

David “Danny” Blanchflower - who sat on the Bank’s Monetary Policy Committee (MPC) from June 2006 to June 2009 - said Chancellor Philip Hammond will struggle to find candidates to replace Mr Carney when he leaves next January.

“Who would take over from Carney?” he said.

“Who in their right mind would take this poisoned chalice?”

The British-born economist, who moved to the US in 1989, said Mr Carney and the MPC have become “highly politicised” since the referendum vote to quit the EU.

The Governor and the MPC have come under heavy criticism over their handling of communications surrounding Brexit - in particular the Bank’s doomsday scenario report on Brexit, which led to accusations of collusion with the Government and “implausible” forecasts.

Mr Blanchflower said US economists cannot believe “how politicised the MPC has become”.

“Because politics intrudes on all of this, that’s an impossible job to be on the MPC,” he said.

“It’s a pretty tough place to be on the MPC right now.”

His comments come as Mr Hammond prepares to revive plans to recruit a successor for Mr Carney this year, after persuading him to extend his term by an extra seven months to help ease disruption from Brexit at a critical time.

It marked the second extension, after Mr Carney said in 2016 he would stay for an extra year, originally until June 2018, following the end of his five-year term.

His tenure has been marred over the past two years, with the Brexit scenario analysis the latest to provoke a vicious backlash.

Another former MPC member, Andrew Sentance, recently told MPs the report was “extreme” and “implausible” and called into question the Bank’s independence from the Government under Mr Carney’s reign.

Mr Carney has also faced criticism over his attempts at so-called forward guidance on rates, after bracing borrowers and financial markets for hikes that did not come to pass.