Mark Carney, meet Thomas Catto.
As Bank of England governor from 1944 to 1949, Catto never changed interest rates the entire time he was in office. The way the outlook is shaping up, Carney may be next to hold that distinction.
Bank of Japan negative interest rates and warnings from the Federal Reserve about the global economy reinforce both a sense of caution among central banks and the prospect that U.K. rates aren’t moving from 0.5 percent any time soon. Moreover, inflation pressures are so weak that investors have pushed out bets on a full quarter-point increase to the first three months of 2018, shortly before Carney’s term is scheduled to end.
“It’s not impossible that Carney leaves without raising rates,” said Philip Shaw, an economist at Investec Securities in London. “You don’t have to go much further than what the market’s telling you now to see the end of his term coinciding with no hike, though it’s not our central forecast.”
Carney has other options to avoid becoming the next Catto — he hinted in Parliament last week that he may seek to extend his tenure to the full eight years permitted by legislation. When he arrived from the Bank of Canada in July 2013, he said he’d only stay five years.
