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George Osborne announces new member of key Bank of England committee

Published 15/04/2016

Chancellor George Osborne has appointed a new member of the MPC
Chancellor George Osborne has appointed a new member of the MPC

Chancellor George Osborne has appointed Michael Saunders to the Bank of England's Monetary Policy Committee (MPC).

Mr Saunders, who is currently the managing director and head of European economics at Citigroup, will take up the role on a three-year term from August 9.

It means Mr Saunders will be one of nine members of the MPC who will vote on the direction of monetary policy in order to meet the Government's inflation target of 2%.

He will replace Dr Martin Weale whose second term of office comes to an end on August 8.

Mr Osborne said Mr Saunders brought "a wealth of economic experience both on the UK and global economy and will make a strong addition to the MPC".

He added: "I also want to put on record my thanks to Dr Martin Weale for his record of outstanding service to the MPC since 2010, and whose perspective, expertise and insightful contributions have been invaluable during his time in office."

His appointment follows the announcement last week that Sam Woods would join the Bank as the deputy governor in charge of prudential regulation, succeeding Andrew Bailey who is to become the chief executive of the Financial Conduct Authority (FCA).

Bank of England governor Mark Carney said Mr Saunders would bring his " first-rate knowledge of the UK economy" to the MPC.

He added: " I would also like to take this opportunity to thank Martin Weale for the exceptional contribution he has made to the work of the Monetary Policy Committee over the past six years.

"Martin joined the committee at a time of grave economic challenge for the United Kingdom, bringing invaluable practical knowledge of the UK economy coupled with academic expertise.

"Amongst his many contributions, Martin advanced our understanding of the labour market, assisted in the development of unconventional monetary policy and supported the Bank's efforts to increase transparency and effective communication."

Mr Saunders worked as an economist at Greenwell Montagu and the Institute for Fiscal Studies before joining the US banking giant Citigroup in 1990.

The Bank warned on Thursday that a Brexit vote could hurt the economy and ''push down on demand'' as it kept the cost of borrowing on hold once more.

The MPC said the economy may face ''an extended period of uncertainty'', as it considered the ''likely implication for monetary policy'' if Britain left the European Union.

The comments came as all nine policymakers on the MPC voted to leave rates at 0.5% - where they have remained since March 2009 - and keep its quantitative easing programme on hold at £375 billion.

Minutes of the meeting showed the MPC also stood by its stance that the next move for rates would be a rise rather than a cut, stating ''it is more likely than not that the Bank rate will need to increase over the forecast period''.

Experts are predicting interest rates to stay at 0.5% until 2017, although some believe a rate rise might come even sooner if Britain votes to stay in the EU.

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