Mark Carney, the embattled Bank of England governor, has extended his term to June 2019, when the Brexit negotiations are expected to have completed.
The announcement will put an end to speculation he would quit in 2018, after a five-year term. But it also contradicts conflicting reports that he would serve out the full eight-year term, which would have ended in 2021.
In a letter to the Chancellor, Carney said he wanted to “contribute to securing an orderly transition to the UK’s new relationship with Europe”.
When he was appointed, Carney negotiated a five-year break clause, for “personal, family considerations”.
In the letter, he said his personal circumstances had not changed “but other circumstances clearly have”.
Carney has come under fire from Brexiteers, who accused him of “talking down” the economy after he predicted price rises and other pressures on the economy. Daniel Hannan, a Tory MEP, has called on him to resign.
In his reply, Philip Hammond appeared to try to quash these criticisms, with specific praise for his “highly effective leadership”.
The decision means Carney will stay at the helm throughout the two-year period after Article 50 is triggered. However, it still means the governor George Osborne poached from Canada will leave two years short of a full term.