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Mark Carney new head of Bank of England

Mark Carney has officially become head of the UK’s central bank, replacing Sir Mervyn King as governor of the Bank of England.

Mr Carney, who was head of Canada’s central bank, is the first foreigner to run the 319-year-old institution.

He takes over with interest rates at an all-time low and with several stimulus programmes in place to revive the economy following the financial crisis.

Mr Carney is likely to oversee the Bank’s exit from these measures.

Financial markets are already braced for an end to the era of cheap money as central banks such as the US Federal Reserve signal a rise to more normal levels of interest rates over time.

Since the economic crisis began in 2008, the Bank has kept interest rates at historic lows and implemented quantitative easing to inject £375bn of liquidity into the financial markets.

Three members of the rate-setting Monetary Policy Committee, including Sir Mervyn, have voted for an extra £25bn of QE at the past few meetings.

Some analysts think the Bank may increase the stimulus programme later in the year after Mr Carney takes over.

‘Lucky to have him’

Speaking about Mr Carney, former MPC member DeAnne Julius told the BBC that “most sensible people realise that he can’t wave a magic wand and fix everything”.

She added: “It’s just possible that he could be lucky, he could be coming into this job at just the right moment because the economy is recovering, financial markets are strong. He’s probably, as an outsider, the best person to change the culture in the Bank of England – something that’s been needed for a while. So I’m quite optimistic.

“I think we’re lucky to have him,” she added. “I think he has a great track record from his Canadian experience. He’s very well known internationally.

Mr Carney is respected for his handling of monetary policy in Canada, which was also the only G7 nation not to have to bail out its banks.

In February, Mr Carney did not rule out changes to the way the bank runs monetary policy but said the current policy of inflation targeting had been the most successful.

‘Outstanding banker’

In announcing his appointment last year, Chancellor George Osborne said Mr Carney was acknowledged as “the outstanding central banker of his generation”.

Mr Carney was educated at the universities of Harvard and Oxford. He spent 13 years with the investment bank Goldman Sachs before taking over the Canadian central bank.

He was once listed by Time Magazine as one of the 25 most influential people in the world.

A fluent French speaker, Mr Carney was appointed deputy governor at the Bank of Canada in 2003, spending a year there before becoming senior associate deputy minister of finance until his appointment to the central bank’s top job.

He also serves as chairman of the Basel-based Financial Stability Board (FSB) and as a member of the board of directors of the Bank for International Settlements.

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

The former head, Sir Mervyn, joined the Bank as its chief economist in 1991 and became its deputy governor from 1998 to 2003, when he took over the top job. He served 10 years as head of the Bank.

Under Sir Mervyn’s watch, the Bank was criticised for failing to spot that banks were over-extended and has also taken on more responsibility for regulating the UK financial sector in the aftermath of the crisis.

The term for a Bank governor is eight years. But Mr Carney has indicated he intends to serve for five years and stand down at the end of June 2018.

The Bank of Canada has named economist Stephen Poloz as his replacement.