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Britain Is Getting Ready for Its Space Race

Cornwall, in England’s far southwest, is known for antique fishing villages and snug, cliff-lined beaches. Soon it may be the scene of something very different: a small but growing space industry.

One day in a year or two, a modified Boeing 747 is expected to lift off from the long runway at the region’s airport, head out over the Atlantic Ocean and soar into the stratosphere. There, a rocket will drop from below a wing, fire its engines and ferry a load of small satellites into orbit, while the plane returns to the airport.

After six years of planning and fund-raising, construction of a bare-bones spaceport, budgeted at about 22 million pounds ($28 million), is beginning this month at the airport in Newquay.

The anchor tenant is expected to be Virgin Orbit, a part of Richard Branson’s Virgin universe. Its selling point: Putting satellites into orbit via aircraft can be done faster and with less infrastructure than earthbound rockets. It plans to bring its 747 (called the Cosmic Girl) and other gear being tested in the Mojave Desert to Britain with the help of £7.35 million from the U.K. Space Agency.

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Credit…Francesca Jones for The New York Times

“At the beginning, people laughed at us,” said Melissa Thorpe, head of engagement for Spaceport Cornwall, the developer. “It took a lot of work to convince a lot of people.”

Among the better arguments: The spaceport, which is owned by the local government, could eventually provide 150 good jobs in what, despite its charm, is a region dependent on low-paid, seasonal work from tourism.

Britain is doubling down on the always risky space business after, some would say, years of neglect. Besides Cornwall, the government is putting money behind several other potential launch sites, including one on the remote north coast of Scotland, which is being tailored for an environmentally friendly rocket to be manufactured nearby.

This is all new for a country that does not have a deep history of rocketry or launching satellites into space. The case for spaceports in Britain is far from proven. In fact, some analysts say there are already too many such facilities, including in the United States.

The first — and, to date, only — British-made satellite-bearing rocket was launched from Woomera in Australia in 1971. That program, called Black Arrow, was scrapped after four launches for not being cost effective.

“You do have to pinch yourself that the U.K is within a few years of launching satellites,” said Doug Millard, space curator at the Science Museum in London. “That is something that never would have been considered not so long ago.”

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Credit…Francesca Jones for The New York Times

A big reason for the turnaround is Brexit. The decision to pull away from the European Union has heightened awareness that Britain, which has largely relied on European and American space programs for services like satellite navigation, would be at risk without its own space infrastructure. This year the space agency’s budget was bumped up 10 percent to £556 million (still a small fraction of NASA’s $22 billion).

Brexit has provided “a real stimulus to get us to think about what we actually need as a country in space,” said Graham Turnock, chief executive of the U.K. Space Agency, in an interview.

But the decision to look skyward also coincides with the growing commercial use of space around the world, promoted by deep-pocketed investors like Elon Musk, Jeff Bezos and Mr. Branson, but also pushed along by a range of less prominent entrepreneurs and businesses.

Key has been the emergence of much smaller and cheaper satellites, some the size of a shoe box and costing a relatively small $1 million or less. Some are used for observation, such as measuring how much oil is stored in a tank farm, valuable data for energy investors. Others are planned to provide internet connectivity on earth and a key link in the burgeoning internet of things, essential for self-driving cars and smart kitchens.

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Credit…Francesca Jones for The New York Times

“We are right at the beginning of this journey,” said Mark Boggett, chief executive of London-based Seraphim Capital, which is managing a $90 million space fund.

The government of Prime Minister Boris Johnson put its own chips on such efforts by agreeing in July to spend £500 million to acquire 45 percent of OneWeb, a satellite operator.

OneWeb filed for bankruptcy this year, but is involved in the hottest area of the satellite industry: the creation of so-called constellations, blizzards of coordinated satellites in low orbit, designed to provide blanket coverage for purposes like extending the internet to remote regions.

OneWeb is building its satellites at a factory co-owned by Airbus in Florida. The hope in the British government and space community is that OneWeb will build a future generation of satellites in Britain.

Over all, the government is trying to support activity in what is known as “new space,” a more agile and commercial approach to an industry traditionally dominated by government and military programs.

“OneWeb, and what we are doing on launch, is all about taking a really big role in that new economy,” Mr. Turnock said.

While Britain has participated in prestigious space activities like making a Mars rover for an upcoming European-Russian mission, it has catching up to do. Still, space experts say the direction the industry is moving could play to its advantage.

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Credit…Francesca Jones for The New York Times

The launch vehicles that Britain is trying to nurture would be suited for smaller satellites that operate in low-Earth orbit, around 800 miles up, compared with about 22,000 miles for telecommunications giants that sometimes cost hundreds of millions of dollars.

Smaller satellites also have much shorter life spans than the larger ones, implying the need for more of them, and more launches. Virgin Orbit says it plans to charge $12 million to take a nearly 700-pound payload of satellites into space.

Having nearby launch sites will fill a need for companies like In-Space Missions, a space service firm in Hampshire, outside London. Doug Liddle, the chief executive, said the company went all the way to New Zealand to launch a satellite this year, only to lose it when the rocket failed.

The new space economy is also more affordable for medium-size countries like Britain. “The small-satellite approach now means we are not going to spend our entire national budget on our space program,” said Martin Sweeting, a founder and executive chairman of a British university spinoff called Surrey Satellite Technology, a pioneer in small satellites.

Space is also becoming far more accessible to start-ups like Open Cosmos, which offers to build satellites and arrange their launch and early operation at a cost of $10 million or less. The company is one of many technology businesses clustered in Harwell, a community near the University of Oxford.

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Credit…Francesca Jones for The New York Times

Among the neighbors are clients like Lacuna Space, which plans to deploy satellites for a range of uses like tracking cattle on vast Latin American ranches, and potential suppliers like Oxford Space Systems, which builds satellite-mounted antennas that unfurl once in orbit to send data to ground receivers.

“It is a small ecosystem; everybody knows each other,” said Rafel Jordá Siquier, the 31-year-old founder of Open Cosmos.

But not all the companies are start-ups. Airbus, the giant French maker of commercial aircraft, is also a major manufacturer of satellites and employs 3,500 people doing space work in Britain.

The company had been nervous about Brexit’s implications for those operations, but the government’s move into OneWeb offered some reassurance.

“The investment in OneWeb and focus of the U.K. on space is actually making Airbus go, ‘Look, the U.K. is a really good place to invest,’” said Richard Franklin, head of space and defense for Britain at Airbus.

That said, Britain’s ambitions face large unknowns and risks.

The launch technologies it is counting on are unproven. Virgin Orbit’s first test this year in the United States sputtered when the main rocket engine shut down. And the coronavirus pandemic has put huge financial strain on Mr. Branson’s empire, including the flagship, Virgin Atlantic. To help bolster the finances of the airline and other companies, the entrepreneur sold around $500 million of shares in Virgin Galactic, a space tourism business.

But Will Pomerantz, Virgin Orbit’s vice president for special projects, said the 747 would come to Cornwall “when they are ready and they need us.”

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Credit…Francesca Jones for The New York Times

The satellite market is also both competitive and turbulent. Tesla’s founder, Elon Musk, whose SpaceX has carried U.S. astronauts to the International Space Station and returned them safely to Earth, is building his own mega constellation satellite system, Starlink. Other technology companies are likely to follow, while many countries can now build satellites.

“One of the beautiful things about small sats is that anyone can make one,” said Alexandre Najjar, senior consultant at Euroconsult, a market research firm.

Still, Britain’s space entrepreneurs say having a launchpad near home might give them an edge.

”If we can get in a van and drive our spacecraft up to Scotland or Cornwall, the whole process becomes much more straightforward,” said Mr. Liddle, the satellite builder.

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Credit…Francesca Jones for The New York Times

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Post-Brexit, Britain Is Going Its Own Way. That Way Looks Expensive.

ROWLEY REGIS, England — Except for protracted uncertainty over Britain’s future relationship with Europe, these are promising days at Cube Precision, a factory in the Black Country of England.

The company manufactures tools used to make parts for airplanes and cars. Some of those parts eventually wind up in jets made by Airbus, a company now overwhelmed with orders as a safety scandal engulfs its primary competitor, Boeing. Another catastrophe is also increasing its sales: Companies that had been hiring Chinese factories to make their tools are shifting orders to Cube Precision to avoid the chaos of the coronavirus epidemic.

But Brexit threatens revenue-destroying disruption.

Like most of British industry, Cube Precision is intimately intertwined with Europe, selling its wares to companies that send exports there. Last month, Britain officially left the ranks of the European Union. In the next few weeks, negotiators plan to begin hashing out a deal governing future trade across the English Channel. The positions staked out by the British government pose perils for businesses that depend on Europe for sales and parts.

Prime Minister Boris Johnson and his Conservative Party owe their commanding parliamentary majority to nationalist sloganeering that promises to “Get Brexit Done” and “Take Back Control.” As the government prepares for trade talks, it is asserting the right to diverge from European rules governing a host of commercial concerns — from fishing access and financial regulations to product safety, labor and environmental standards.

Britain might diverge, or might not, officials keep saying — a careful dance designed to limit the damage for British exporters while delivering on the political imperative to declare that Brexit has been achieved.

Image
Credit…Andrew Testa for The New York Times

The negotiations amount to an extraordinary historical anomaly: After decades of trade liberalization around the world, the governments of two major economies are sitting down to determine the extent of barriers they will place in the way of existing commerce.

If Britain is serious about writing its own rules, its factories could lose orders from European companies that now pay them to make parts and tools. Those companies might shift orders to suppliers on the Continent to ensure that their finished goods comply with European rules.

“We need to make sure that the trade deals are still in place so that we can supply our European customers, so that they can build their aircraft and build their cars,” says Cube Precision’s managing director, Neil Clifton. “In the worst-case scenario, there could be a lot of trouble.”

Studiously optimistic, he expresses confidence that, after the inevitable political brinkmanship, the politicians will strike a deal allowing business to carry on.

“I like to believe that the deals that we will get will be roughly broadly in line with what we have at the moment,” Mr. Clifton says. “Both sides have far too much to lose.”

But if three-plus years of tangled debate over Brexit has produced any clarity, it is this: What makes sense for business and what actually happens are frequently two different things.

While Britain has been part of the European Union, its companies have been able to do business with counterparts from Greece to Ireland as if this vast territory of 500 million people were a single nation, free of borders, tariffs and hindrances like customs checks.

Voluminous studies have concluded that abandoning Europe’s single market for goods and services will diminish Britain’s economic growth. Britain sends nearly half of its exports to Europe. Whatever the eventual terms of trade across the English Channel, some of this commerce is likely to confront impediments.

Under the terms of Britain’s exit, a transition period mandates that nothing changes until the end of the year.

Even by the standards of the typical trade deal, negotiations will be fraught, filling conference rooms in Brussels and London with armies of lawyers, accountants, bureaucrats and experts in the arcana of fishing, pharmaceuticals, farming, banking and manufacturing for months, and probably years.

British law reflects the country’s decades of inclusion in the European trading bloc. Disentangling itself while determining new rules is a process that has been likened to unscrambling an omelet.

Mr. Johnson and his senior officials have oozed confidence that they can break from European rules and still maintain largely uninterrupted access to the European marketplace. His counterparts in Brussels have consistently said this is nonsense.

“The truly difficult choices still lie ahead,” says Phil Hogan, the European commissioner for trade. “The further the U.K. chooses to diverge from the European standards and rules and regulations, the less it can benefit from the protections and economic strengths of the E.U. single market.”

European officials are adamant that Britain respect rules governing a so-called level playing field, including labor, tax and environmental standards, along with prohibitions on subsidizing industry.

Mr. Johnson aims for a deal that avoids tariffs and quotas on products, similar to the arrangement that Europe forged with Canada in 2016. That deal took seven years to negotiate. Mr. Johnson insists Britain will complete a deal with Europe by the end of this year — a stance that experts assume will give way to a euphemism for an extension.

If talks break down, Mr. Johnson says, Britain can trade under the terms laid down at the World Trade Organization. That would entail tariffs on British exports to the Continent averaging a modest 3 percent.

But trade experts say that position is either a bluff or foolhardy. If Britain crashes out of the European bloc without a deal, that invites expensive disruption at ports.

And tariffs are not the primary concern. A departure from European regulations could prompt global companies to put new operations in Europe while avoiding Britain.

Between the middle of 2016 — when Britain voted to leave the European Union — and the end of last year, business investment increased only 1 percent, according to government data. Over the three previous years, business investment expanded by a total of 16 percent. If Britain diverges from European regulations, the slowdown could worsen.

“The real cost is lack of investment,” says Charles Grant, director of the Center for European Reform, a research institution in London. “Food, manufacturing, cars, aerospace, chemicals will all have big problems.”

Part of Mr. Johnson’s motivation to diverge from European rules is his eagerness to negotiate a trade deal with the United States, affirming his oft-repeated claim that Brexit is an opportunity for Britain to look beyond Europe.

Image

Credit…Sam Bush for The New York Times
Image

Credit…Sam Bush for The New York Times

The Trump administration is likely to demand that Britain break from European food safety standards, allowing American companies to export chlorinated chicken and genetically modified crops.

Accepting such products would provoke public anger in Britain. Whatever the gains from a trade deal with the United States, they would not compensate for the likely loss of sales to Europe.

“The E.U. is a big market, it’s very close, and we are completely integrated with it,” says Andrew Goodwin, chief United Kingdom economist for Oxford Economics in London.

Britain’s auto industry generates annual revenue of 82 billion pounds (about $107 billion) and employs about 800,000 people, according to Deloitte, the global accounting firm. Those jobs are highly dependent on unimpeded trade across the English Channel.

Some 60 percent of car parts and accessories made in British factories are exported to Europe, while plants on the Continent are the source of 80 percent of imported car parts in Britain. Eight out of every 10 cars made in Britain are exported, according to the European Automobile Manufacturers Association, a trade group.

Inside a factory in Shrewsbury, a town famed for its medieval streets, SDE Technology operates towering presses that pound metal into desired shapes, deriving 70 percent of its revenue from making auto parts.

As the company’s chief commercial officer, Christopher Greenough, walks the concrete floors of the plant, he stops at a crate full of curved pieces of stainless steel, part of a car exhaust pipe. The factory sells this product to a company in Germany that supplies BMW.

That part alone generates annual revenue of about £500,000 (about $651,000), or 4 percent of SDE’s sales. “If there are tariffs, that would affect this product,” Mr. Greenough says.

Still, he and the company’s chief executive officer, Richard Homden, echo the traditional justification for Brexit.

“Going forward, we should have our own destiny,” Mr. Homden says. “We shouldn’t have to look to Europe to set the standards.”

When pressed to provide an example of a European rule that impedes their business, both men come up empty.

“I can’t think of any,” Mr. Greenough says.

They express confidence that Mr. Johnson will extract a favorable deal. Still, they acknowledge risks, prompting them to distinguish their business with new products.

The company is investing some £6 million (about $7.8 million) for new technology that can produce especially light car bodies — a promising feature as the industry shifts toward higher fuel efficiency standards and electric vehicles.

One major source of uncertainty is now gone, factory managers say. After three-plus years of agonizing political debate over whether Brexit would actually happen, Mr. Johnson has resolved that question.

In the town of Telford in the English Midlands, Advanced Chemical Etching makes metal components for cars, jets, drones, satellites and medical devices, with many of these wares destined for Europe.

January was the company’s best month ever, the chief executive, Chris Ball, says. Sales grew more than 40 percent from a year earlier.

He hopes the politicians will not derail those gains.

“Similar trading terms as it is now,” he says. “That would be the ideal thing.”

Geneva Abdul contributed reporting.

Posted on

Post-Brexit, Britain Is Going Its Own Way. That Way Looks Expensive.

ROWLEY REGIS, England — Except for protracted uncertainty over Britain’s future relationship with Europe, these are promising days at Cube Precision, a factory in the Black Country of England.

The company manufactures tools used to make parts for airplanes and cars. Some of those parts eventually wind up in jets made by Airbus, a company now overwhelmed with orders as a safety scandal engulfs its primary competitor, Boeing. Another catastrophe is also increasing its sales: Companies that had been hiring Chinese factories to make their tools are shifting orders to Cube Precision to avoid the chaos of the coronavirus epidemic.

But Brexit threatens revenue-destroying disruption.

Like most of British industry, Cube Precision is intimately intertwined with Europe, selling its wares to companies that send exports there. Last month, Britain officially left the ranks of the European Union. In the next few weeks, negotiators plan to begin hashing out a deal governing future trade across the English Channel. The positions staked out by the British government pose perils for businesses that depend on Europe for sales and parts.

Prime Minister Boris Johnson and his Conservative Party owe their commanding parliamentary majority to nationalist sloganeering that promises to “Get Brexit Done” and “Take Back Control.” As the government prepares for trade talks, it is asserting the right to diverge from European rules governing a host of commercial concerns — from fishing access and financial regulations to product safety, labor and environmental standards.

Britain might diverge, or might not, officials keep saying — a careful dance designed to limit the damage for British exporters while delivering on the political imperative to declare that Brexit has been achieved.

Image
Credit…Andrew Testa for The New York Times

The negotiations amount to an extraordinary historical anomaly: After decades of trade liberalization around the world, the governments of two major economies are sitting down to determine the extent of barriers they will place in the way of existing commerce.

If Britain is serious about writing its own rules, its factories could lose orders from European companies that now pay them to make parts and tools. Those companies might shift orders to suppliers on the Continent to ensure that their finished goods comply with European rules.

“We need to make sure that the trade deals are still in place so that we can supply our European customers, so that they can build their aircraft and build their cars,” says Cube Precision’s managing director, Neil Clifton. “In the worst-case scenario, there could be a lot of trouble.”

Studiously optimistic, he expresses confidence that, after the inevitable political brinkmanship, the politicians will strike a deal allowing business to carry on.

“I like to believe that the deals that we will get will be roughly broadly in line with what we have at the moment,” Mr. Clifton says. “Both sides have far too much to lose.”

But if three-plus years of tangled debate over Brexit has produced any clarity, it is this: What makes sense for business and what actually happens are frequently two different things.

While Britain has been part of the European Union, its companies have been able to do business with counterparts from Greece to Ireland as if this vast territory of 500 million people were a single nation, free of borders, tariffs and hindrances like customs checks.

Voluminous studies have concluded that abandoning Europe’s single market for goods and services will diminish Britain’s economic growth. Britain sends nearly half of its exports to Europe. Whatever the eventual terms of trade across the English Channel, some of this commerce is likely to confront impediments.

Under the terms of Britain’s exit, a transition period mandates that nothing changes until the end of the year.

Even by the standards of the typical trade deal, negotiations will be fraught, filling conference rooms in Brussels and London with armies of lawyers, accountants, bureaucrats and experts in the arcana of fishing, pharmaceuticals, farming, banking and manufacturing for months, and probably years.

British law reflects the country’s decades of inclusion in the European trading bloc. Disentangling itself while determining new rules is a process that has been likened to unscrambling an omelet.

Mr. Johnson and his senior officials have oozed confidence that they can break from European rules and still maintain largely uninterrupted access to the European marketplace. His counterparts in Brussels have consistently said this is nonsense.

“The truly difficult choices still lie ahead,” says Phil Hogan, the European commissioner for trade. “The further the U.K. chooses to diverge from the European standards and rules and regulations, the less it can benefit from the protections and economic strengths of the E.U. single market.”

European officials are adamant that Britain respect rules governing a so-called level playing field, including labor, tax and environmental standards, along with prohibitions on subsidizing industry.

Mr. Johnson aims for a deal that avoids tariffs and quotas on products, similar to the arrangement that Europe forged with Canada in 2016. That deal took seven years to negotiate. Mr. Johnson insists Britain will complete a deal with Europe by the end of this year — a stance that experts assume will give way to a euphemism for an extension.

If talks break down, Mr. Johnson says, Britain can trade under the terms laid down at the World Trade Organization. That would entail tariffs on British exports to the Continent averaging a modest 3 percent.

But trade experts say that position is either a bluff or foolhardy. If Britain crashes out of the European bloc without a deal, that invites expensive disruption at ports.

And tariffs are not the primary concern. A departure from European regulations could prompt global companies to put new operations in Europe while avoiding Britain.

Between the middle of 2016 — when Britain voted to leave the European Union — and the end of last year, business investment increased only 1 percent, according to government data. Over the three previous years, business investment expanded by a total of 16 percent. If Britain diverges from European regulations, the slowdown could worsen.

“The real cost is lack of investment,” says Charles Grant, director of the Center for European Reform, a research institution in London. “Food, manufacturing, cars, aerospace, chemicals will all have big problems.”

Part of Mr. Johnson’s motivation to diverge from European rules is his eagerness to negotiate a trade deal with the United States, affirming his oft-repeated claim that Brexit is an opportunity for Britain to look beyond Europe.

Image

Credit…Sam Bush for The New York Times
Image

Credit…Sam Bush for The New York Times

The Trump administration is likely to demand that Britain break from European food safety standards, allowing American companies to export chlorinated chicken and genetically modified crops.

Accepting such products would provoke public anger in Britain. Whatever the gains from a trade deal with the United States, they would not compensate for the likely loss of sales to Europe.

“The E.U. is a big market, it’s very close, and we are completely integrated with it,” says Andrew Goodwin, chief United Kingdom economist for Oxford Economics in London.

Britain’s auto industry generates annual revenue of 82 billion pounds (about $107 billion) and employs about 800,000 people, according to Deloitte, the global accounting firm. Those jobs are highly dependent on unimpeded trade across the English Channel.

Some 60 percent of car parts and accessories made in British factories are exported to Europe, while plants on the Continent are the source of 80 percent of imported car parts in Britain. Eight out of every 10 cars made in Britain are exported, according to the European Automobile Manufacturers Association, a trade group.

Inside a factory in Shrewsbury, a town famed for its medieval streets, SDE Technology operates towering presses that pound metal into desired shapes, deriving 70 percent of its revenue from making auto parts.

As the company’s chief commercial officer, Christopher Greenough, walks the concrete floors of the plant, he stops at a crate full of curved pieces of stainless steel, part of a car exhaust pipe. The factory sells this product to a company in Germany that supplies BMW.

That part alone generates annual revenue of about £500,000 (about $651,000), or 4 percent of SDE’s sales. “If there are tariffs, that would affect this product,” Mr. Greenough says.

Still, he and the company’s chief executive officer, Richard Homden, echo the traditional justification for Brexit.

“Going forward, we should have our own destiny,” Mr. Homden says. “We shouldn’t have to look to Europe to set the standards.”

When pressed to provide an example of a European rule that impedes their business, both men come up empty.

“I can’t think of any,” Mr. Greenough says.

They express confidence that Mr. Johnson will extract a favorable deal. Still, they acknowledge risks, prompting them to distinguish their business with new products.

The company is investing some £6 million (about $7.8 million) for new technology that can produce especially light car bodies — a promising feature as the industry shifts toward higher fuel efficiency standards and electric vehicles.

One major source of uncertainty is now gone, factory managers say. After three-plus years of agonizing political debate over whether Brexit would actually happen, Mr. Johnson has resolved that question.

In the town of Telford in the English Midlands, Advanced Chemical Etching makes metal components for cars, jets, drones, satellites and medical devices, with many of these wares destined for Europe.

January was the company’s best month ever, the chief executive, Chris Ball, says. Sales grew more than 40 percent from a year earlier.

He hopes the politicians will not derail those gains.

“Similar trading terms as it is now,” he says. “That would be the ideal thing.”

Geneva Abdul contributed reporting.

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Bank of England Picks New Governor to Guide It After Brexit

The British government on Friday named Andrew Bailey, the head of the Financial Conduct Authority, to be the next chief of the Bank of England. Mr. Bailey, who worked at the central bank for over 30 years before leaving to run the financial watchdog in 2016, will succeed Mark Carney.

As head of the Financial Conduct Authority, Mr. Bailey has extensive oversight experience. On Thursday, the regulator said it was investigating the misuse of a Bank of England audio feed that allowed investors to hear comments from news conferences before they were available to the public.

Mr. Bailey will begin his eight-year term on March 16. Mr. Carney, who had previously said he would leave on Jan. 31, will now stay on until March 15.

Mr. Bailey, 60, will be taking charge of the central bank shortly after Britain is expected to withdraw from the European Union, on Jan. 31. He will be tasked with keeping the country’s economy on an even keel and responding to the fallout from the departure, known as Brexit.

In a statement, Mr. Bailey said it was a “tremendous honor” to be chosen for the job, “particularly at such a critical time for the nation as we leave the European Union.”

He will be paid £495,000, but unlike Mr. Carney, who relocated from Canada for the job, he will not receive a housing allowance.

Mr. Carney, who is set to take up a role as the United Nations special envoy for climate action and finance, had extended his term twice before. He stayed on to provide stability at the central bank as the government was roiled by Brexit negotiations, a change in prime minister and then a general election.

He became a steadfast counterpoint to politicians proclaiming the upsides of Brexit. His warnings about a disorderly Brexit attracted accusations of scaremongering.

The Bank of England decided this week to leave its benchmark interest rate unchanged, but said that Britain’s economic growth was below its potential, partly because of uncertainty around Brexit. The bank left open the possibility of lowering the rate if growth remained weak.

“If global growth fails to stabilize or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in U.K. G.D.P. growth and inflation,” the bank said in a summary.

Sajid Javid, the chancellor of the Exchequer, announced the appointment of Mr. Bailey and praised his experience, making note of his work for the Bank of England during the financial crisis.

“It is a tribute to his integrity and character that he emerged from the most serious crash in living memory with his reputation enhanced,” Mr. Javid said.

Mr. Bailey will face a potentially tough challenge. The bank’s benchmark rate is already low, at 0.75 percent, leaving policymakers little leeway in case of a recession. And Mr. Carney himself has commented on the limits to what monetary policy can do in smoothing out the adjustment to the economy if Brexit does bring a severe shock.

The potential impact of Brexit on the City of London, the financial heart of the capital, would also be in focus, said Richard Portes, a professor at London Business School. It would be particularly wrenching if Prime Minister Boris Johnson negotiates a trade deal that did not cover financial services. “I think that will take a lot of his energies and focus,” said Professor Portes.

The chancellor maintained that he wanted Mr. Bailey to “uphold vigorously” the independence of the bank.

“I think that it’s critical that the governor and indeed everyone working with the governor in the Bank of England is independently minded and the institution under the leadership of the governor makes whatever decision is necessary without any interference whatsoever from any government,” Mr. Javid said.

Mr. Javid also referred to Mr. Bailey’s record of increasing the diversity of the leadership at the F.C.A., a nod to the fact that Mr. Bailey takes over a homogeneous team at the Bank of England. All of the deputy governors of the bank are men, though the chief operating officer is a woman. There is only one woman among the nine members of the monetary policy committee, which decides interest rates.

“Under his leadership, he is committed to making the bank a more open and diverse institution,” Mr. Javid said.

Mr. Bailey studied history as an undergraduate at Cambridge University and earned a doctorate in economic history there. He worked as a research officer at the London School of Economics before joining the Bank of England in 1985. He rose through the ranks, becoming deputy governor for prudential regulation and chief executive of the prudential regulation authority in 2013.

In 2016 he took over at the Financial Conduct Authority, the main regulator for markets and financial firms, which has attracted some criticism for its handling of the firms it regulates. Some members of Parliament called for Mr. Bailey’s resignation earlier this year after London Capital and Finance, a firm selling risky investments, went into administration.

He also faced fierce criticism from lawmakers over the agency’s regulation of the flagship fund of Neil Woodford, a prominent stock picker, which ran into problems earlier this year and had to be closed.

Still, Mr. Bailey’s appointment will provide some continuity at the bank. “As far as monetary policy is concerned, the environment is rather uncertain and a lot depends on the form that Brexit takes,” said Professor Portes. “In the short term nothing will change.”