For a former governor, the shift from public servant to party political player is unusual. Lord King, Carney’s predecessor, took a seat in the Lords as a crossbench peer after leaving the Bank, declining to back any party.
Last week it was announced he would take up a new role as president of Marylebone Cricket Club. Eddie George, governor until 2003, similarly took a peerage without party affiliation and a range of City jobs.
A person who has worked with Carney points out that the former banker has always had distinctly political instincts. As recently as November the Canadian said he was considering a bid to replace Justin Trudeau as head of his country’s Liberal Party.
“Given he clearly has ambitions in the Canadian Liberal Party, it is a pretty natural alignment,” the former Carney colleague said.
While Carney and Reeves never overlapped at the Bank of England, the pair have known each other for years, according to sources close to the Labour shadow cabinet minister.
The strong bond between Reeves and Carney can be traced back to 2016 when the then-governor was under serious pressure from Brexit-backing Conservatives amid the intense referendum campaign.
Facing hostile questions from pro-Leave parliamentarians, Carney found Reeves coming to his defence.
“If anyone’s reputation has been damaged there, I do not think it is the Bank of England’s,” Reeves said in a Treasury Select Committee hearing in May 2016 following Sir Jacob Rees-Mogg’s hostile questioning of Carney.
She then offered him the opportunity to set out what he saw as the economic dangers of voting to leave the EU, which he obliged, warning of everything from weaker growth to lower incomes to higher mortgage costs.
“Our bottom line is that there is likely material slowing in growth and likely notable increase in inflation,” Carney told MPs.
However, Carney was not viewed as overtly Labour-leaning when he was leaving the Bank. As prime minister, Boris Johnson appointed him financial adviser for the COP26 summit in 2020, months before Carney was due to step down at the Bank of England.
The appointment reflected the fact that Carney had cultivated expertise on climate finance while governor. He often spoke publicly about the topic and, in 2017, the Bank became a founding member of the Network of Central Banks and Supervisors for Greening the Financial System under his leadership.
Reeves has now appointed Carney to a taskforce examining how to set up a national wealth fund geared towards investment in green industries.