Bank of England Appoints LSE Professor Silvana Tenreyro to MPC -- Update

By Wiktor Szary Features Dow Jones Newswires

Professor Silvana Tenreyro of the London School of Economics and Political Science has been appointed to the Bank of England's Monetary Policy Committee, replacing Kristin Forbes, whose term ends in June.

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Ms. Tenreyro will join the committee as an external member for a three-year term beginning July 7, the Bank of England said Monday.

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

"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," he added.

In one recent paper, Ms. Tenreyro found evidence that monetary policy was more potent during economic expansions than contractions.

She has made few comments on BOE policy. However, she does have experience as a rate setter, sitting on the Bank of Mauritius's MPC from 2012 to 2014.

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While there, she voted for rate cuts on three occasions--in line with the majority of other rate setters on two of those times. Otherwise, she voted for rates to be left unchanged, on some occasions against a minority that wanted to raise rates.

Ms. Tenreyro was awarded her Ph.D. from Harvard University and worked as an economist for the Federal Reserve Bank of Boston between 2002 and 2004.

Nomura analyst Jordan Rochester said her appointment suggested the BOE would be less inclined to raise rates than previously.

"Relative to the hawkish person she is replacing...and the view that new members do not usually jump straight into a bias, we would assume a slight swing to a more dovish vote," he said.

Ms. Forbes was one of three members of the MPC to vote for a rise in the U.K.'s key interest rate this June, after annual inflation accelerated to 2.9% in May. This was well in excess of the BOE's 2% goal and the central bank's own forecasts.

Write to Wiktor Szary at Wiktor.Szary@wsj.com

(END) Dow Jones Newswires

June 19, 2017 08:52 ET (12:52 GMT)