Mark Carney, governor of the Bank of England, is ready to serve a full eight-year term, facing down Brexiter critics campaigning for him to resign ahead of time.
Mr Carney has told friends that he is likely to make a statement on his future this week to put an end to damaging speculation.
The governor is expected to confer with Prime Minister Theresa May and Chancellor Philip Hammond before making a final “personal” decision, potentially ahead of the publication of the BoE’s inflation report on Thursday.
Financial markets, which have pummelled sterling since Britain voted to leave the EU in June, will be watching developments closely for signs of further political uncertainty. On Monday morning, the pound was trading at $1.218 against the US dollar, the same level it ended the day at on Friday.
Mr Carney is said to be leaning strongly towards staying in his post. He would like to help steer the UK economy through treacherous waters once the government triggers Article 50 in March 2017, starting a two-year clock on divorce negotiations with Brussels.
“Mid-2018 could be the darkest days for the UK,” said a person familiar with the governor’s thinking.
Friends say that Mr Carney is determined to defend the Bank of England’s independence in the face of a sustained attack by Brexiters, who claim the bank produced doom-laden forecasts for the UK economy to boost the Remain campaign.
Sir Martin Sorrell, chief executive of advertising group WPP, lent his support to Mr Carney on Monday morning, saying: “It’s important that Mark Carney stays and I hope he will. He is a strong hand at the monetary tiller. If he goes that adds even more uncertainty. His prompt action helped us post-Brexit when things could have got quite nasty.”
Britain’s relatively robust economic performance since the referendum has encouraged prominent Conservatives, including former chancellor Nigel Lawson and Tory MP Jacob Rees-Mogg, to call for the governor’s head.
Daniel Hannan, a Tory MEP and leading Brexiter, added to calls for his resignation, saying: “I am sorry to say this — he seems a nice enough fellow — but Mark Carney should indeed resign. He politicised his office inexcusably.”
Speaking to BBC Radio 4 on Monday morning, Mr Hannan said: “If he does stay, it must be on the basis that he sticks narrowly to his brief.”
Brexiters scented blood after Mrs May suggested at the Conservative party conference that the bank’s ultra-low interest rate policy was hurting savers rather than helping to stave off recession.
Mr Carney was subsequently reassured by Downing Street, but restated the boundaries between the BoE’s independence to set policy to hit the government’s target.
After the Tory party conference, he publicly warned that he would not “take instruction” from politicians about how to go about his duties. “The objectives are what are set by the politicians. The policies are done by technocrats,” the governor said.
Until recently, Mrs May and Mr Hammond were confident that he would stay until 2021 rather than stepping down in 2018, serving a full eight-year term.
When Mr Carney accepted the post in 2012, he committed only to serve the first five years of his term but left open the option of extending to the full eight years.
He cited personal circumstances, including the schooling of his four daughters. But in the run-up to the referendum, and with his family settled in London, then-chancellor George Osborne sought to persuade him to serve the full term.
Last week, Mr Carney hedged his bets in testimony to the House of Lords, saying: “It’s an entirely personal decision and no one should read anything into that decision in terms of government policy. It is a privilege for me to have this role.
“Like everyone, I have personal circumstances that I have to manage. This role demands total attention and I intend to give it as long as I can.”