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LSE professor appointed to Bank's Monetary Policy Committee


Chancellor Philip Hammond said he was confident Professor Silvana Tenreyro will be a strong addition to the MPC

Chancellor Philip Hammond said he was confident Professor Silvana Tenreyro will be a strong addition to the MPC

Chancellor Philip Hammond said he was confident Professor Silvana Tenreyro will be a strong addition to the MPC

The Chancellor has appointed London School of Economics (LSE) Professor Silvana Tenreyro to the Bank of England's Monetary Policy Committee (MPC).

Ms Tenreyro will replace outgoing member Kristin Forbes, who will step down from the MPC at the end of this month.

The committee, which decides on the path of UK interest rates, had dropped to just eight members from the usual nine after Bank deputy governor Charlotte Hogg was forced to resign in March for failing to declare that her brother works for Barclays.

Chancellor Philip Hammond said: "I am delighted to appoint Professor Silvana Tenreyro as the new external member of the Monetary Policy Committee at the Bank of England.

"I am confident that Professor Tenreyro will be a strong addition to the MPC, bringing a wealth of economic experience and academic rigour to the committee's deliberations."

Prof Tenreyro will join the Bank as an external MPC member on July 5 and will be eligible to cast an interest rates vote during the committee's meeting in August.

The announcement comes after the MPC kept interest rates on hold at 0.25% on Thursday, but three policymakers called for a rise amid warnings that Brexit-fuelled inflation is set to surge further over the summer.

Ian McCafferty and Michael Saunders joined Ms Forbes in voting for a rise to 0.5%, marking the first time that three members have dissented for more than six years.

The City will be looking out for any clues as to whether Prof Tenreyro will also take a hawkish stance in the coming months and tip the balance towards a hike in the cost of borrowing.

Bank governor Mark Carney said: "I am delighted to welcome Silvana Tenreyro to the Monetary Policy Committee and am very much looking forward to working with her.

"Her extensive and varied academic experience - on the monetary transmission mechanism, the dynamics of productivity, trade, housing issues as well as wage dynamics, to name just a few - will be invaluable to the committee as it seeks to promote the good of the people of the United Kingdom through maintaining monetary stability."

Prof Tenreyro, an economics professor at the LSE, has worked as an economist at the US Federal Reserve Bank of Boston and has been an MPC member at the Bank of Mauritius.

Her appointment will ensure the Bank continues to have at least one woman on the MPC following Ms Forbes' exit, the resignation of Ms Hogg and the departure of Minouche Shafik.

The Treasury said it will recruit a deputy governor of markets and banking in "due course" to replace Ms Hogg, who left the Bank at the end of April.

Martin Beck, lead UK economist at Oxford Economics, said it was unclear what Prof Tenreyro's views were on UK monetary policy.

But he said the latest MPC recruit, who has British, Argentine and Italian citizenship, was likely to "shift the MPC's balance in a dovish direction".

He said: "Professor Tenreyro's academic background does not offer any clues as to what her attitude might be towards the stance of UK monetary policy.

"However, she does replace someone who has recently been the most hawkish member of the MPC. Ms Forbes used the last three successive committee meetings to vote for a hike in bank rate."