Incoming BoE governor Carney defends £800k pay package

The future governor of the Bank of England, Mark Carney, has defended the salary he will be paid in a hearing with the Treasury Committee.

by Michael Northcott
Last Updated: 19 Aug 2013

At a time when executive pay is under the public microscope, expect widespread outrage to learn that the new BoE governor will receive a total of around £800,000 a year when he starts at the bank.

His pay includes a £480,000 salary and a £250,000 housing allowance: a considerable increase on current governor Mervyn King’s pay packet - he earns £305,000 per year in total.

But Carney, at a hearing in the House of Commons’ Treasury Committee today, insisted that when everything is taken into consideration, his pay is ‘equivalent’ to that of the current governor. He said: ‘I’m moving from one of the least expensive capital cities in the world – Ottawa – to one of the most expensive capital cities in the world.’ 

He did also talk monetary policy, saying that the current tactic of targeting inflation sets a 'high bar' for any alternatives. Those could include targeting GDP, something he has apparently discussed with other high level figures, but not in any great detail.

Still, some MPs seemed keen to get the most out of the debate about his salary. MP Teresa Pearce, on the select committee, raised the question with Carney of whether he was worried about ‘resentment’ amongst his future colleagues in the Bank of England, who have seen their pay frozen for at least the last two years. 

It seems a fair point, as the pay package is not only a large increase on Carney’s predecessor, but will make him one of the highest paid people on the public pay roll. 

Still if he can lead broken Britannia back to the land of milk, honey and growth he could prove worth every penny. It's a minute sum compared to what he would be on had he returned to Goldman Sachs...

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