Philip Hammond has confirmed plans to Mark Carney to remain the Bank of England’s governor until 2020.

In a statement released on Tuesday, the chancellor said Carney and Sir Jon Cunliffe, the deputy governor have both been reappointed to ensure a smooth Brexit.

“I’m delighted that the governor has agreed to stay in his role for a further seven months to support a smooth exit from the European Union and provide vital stability for our economy,” said Hammond in the statement.

In reference to Cunliffe, Hammond said: “I’m delighted to announce the re-appointment of Sir Jon Cunliffe for a further term as Deputy Governor, and I’m confident his extensive experience will continue to be a valuable asset to the Bank of England.”

The reappointment will officially be made by the Queen, who has been advised by the prime minister and Hammond.

In a letter to Hammond, Carney said: “I recognise that during this critical period, it is important that everyone does everything they can to support a smooth and successful Brexit.”

“Accordingly, I am willing to do whatever I can in order to promote both a successful Brexit and an effective transition at the Bank of England,” he added.

Last week, MPs asked Carney if he would consider remaining on as the Bank of England’s chief to ensure a smooth Brexit.

Carney said at the time: “Even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and effective transition at the Bank of England. The chancellor and I have discussed this. I would expect an announcement to be made in due course.”

Nigel Farage did not respond well to Hammond’s statement. He wrote on Twitter: “Truly appalling decision to extend Mark Carney’s term at the Bank of England. He is a Remainer, how can we take this government seriously?”

In contrast, Nicky Morgan, who chairs the influential Treasury select committee, was more optimistic.

“This announcement provides much-needed stability and clarity during this important period. The government should now use the extra seven months to continue its succession planning. It should identify a candidate in good time for the Treasury committee to scrutinise the appointment,” she said.