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Future BoE chief defends pay package

February 7th, 2013 Bussines

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The future governor of the Bank of England (BoE), Mark Carney, has been forced to defend his pay arrangements to members of the House of Commons’ Treasury Committee.

Mr Carney, who is currently the governor of the Bank of Canada, will be paid a total of more than £800,000 a year.

That is despite a recent pay freeze introduced for BoE staff.

He is due to take over from the current governor Sir Mervyn King in July.

Mr Carney’s remuneration includes a salary of £480,000, plus an annual pension allowance of £144,000 and a housing allowance of £250,000.

Speaking in front of the committee, he defended the housing allowance, arguing that such arrangements were “common” for executives moving to London, which he characterised as “one of the most expensive capital cities in the world”.

His current home of Ottawa, he noted, was one of the cheapest.

Mr Carney is also expected to be quizzed on the bank’s monetary policy and how it can help boost the UK’s struggling economy.

Both the Chancellor George Osborne and Sir Mervyn have suggested the bank could do more.

On Wednesday, Mr Osborne said the BoE should complement the government’s deficit reduction strategy with monetary policy that “should continue to support the economy”.

The UK has suffered from recessionary periods and low growth since 2008, and the bank has responded by keeping interest rates at historic lows and enacting a programme of quantitative easing.

That has involved pumping £375bn into the financial markets in an attempt to stimulate the economy.