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Carney will not serve full eight-year term

Mark Carney leaves Number 10. Credit: PA

Tonight's exchange of letters between the Chancellor of the Exchequer and the Governor of the Bank of England, which announces Mark Carney will stay as governor till June 2019, shows where real power sits in the UK - and it's at the Bank rather than Downing Street.

Because Carney has dictated the terms of his departure, in deciding to stay a year later than he originally planned and two years earlier than his full term and than the chancellor and prime minister wanted.

The point is that had he gone in 2018, as he was threatening to do, investors would have been troubled - because this would probably be the moment of maximum strain in the economically vital negotiations on our terms of exit from the EU, and therefore not an ideal juncture for there to be a new and untested hand on the tiller at the Bank of England.

So markets will be reassured that he is staying till the completion of those so-called Article 50 negotiations. But they will still be anxious because - of course - the Article 50 talks could bomb, with horrid consequences for exporting businesses and our future growth prospects.

However, Carney has decided to put family interests first by going in 2019 (he has children at a crucial stage of their school education): the prime minister's clumsily worded speech to Tory party conference - which was seen as an encroachment on his autonomy - contributed to him prioritising his private interests over public service.

Nor has he especially enjoyed the barrage of attacks to which he's been subjected from senior Tories, from the former chancellor Nigel Lawson to the eloquent maverick backbencher Jacob Rees-Mogg.

All that said, maybe Numbers 10 and 11 Downing Street under-estimated the strength of their own negotiating position, because in practice Carney's own reputation might not be at its peak in 2018, if the economy is in the doldrums then (which is by no means impossible) - so it's not wholly irrational for him to choose to go in 2019.