The U.K. government on Thursday named Treasury veteran David Ramsden as deputy governor of the Bank of England, filling a vacancy on the rate-setting Monetary Policy Committee that was created by the previous incumbent's failure to disclose a conflict of interest.
In addition to helping decide interest rates, Mr. Ramsden will manage the central bank's balance sheet in his role as one of four deputy governors with specific responsibility for banking and markets. He will also sit on the Financial Policy Committee and the Prudential Regulation Committee, which between them set the rules for lenders and other financial institutions.
Mr. Ramsden joined the Treasury in 1988 and is now its chief economic adviser, having worked in a variety of roles that included leading the government's assessment of whether the U.K. should adopt the euro. After four years of deliberation, the U.K. in 2003 decided against joining the eurozone.
"Sir Dave's unrivaled experience at the center of U.K. economic policy for more than two decades gives him the thorough grounding needed to be successful in his new role," said Philip Hammond, the U.K.'s Treasury chief. "His departure will be a loss to the Treasury."
The BOE job became available when Charlotte Hogg resigned in March after a panel of lawmakers said her failure to disclose a potential conflict of interest meant she shouldn't do her job. During her four years at the BOE, Ms. Hogg had neglected to disclose that her brother worked in a senior role at U.K. lender Barclays PLC.
BOE Gov. Mark Carney welcomed Mr. Ramsden's appointment.
"As an outstanding public servant, he will bring a wealth of experience and economic expertise to the bank's policy committees," he said.
Mr. Ramsden will be well prepared for one aspect of his new job, having acted as the Treasury's representative at MPC meetings since mid-2007. As a result, he has attended more MPC meetings than most current members of the body. Mr. Ramsden's predecessor as Treasury representative at MPC meetings was Jon Cunliffe, who has been a deputy governor at the central bank since 2013.
He joins an MPC that is divided on whether it should raise the central bank's key interest rate from a record low of 0.25% in response to an inflation rate that is above its 2% target. In June, three members voted for a rate rise, but one of those has now left.
Those who oppose a rate rise point to the uncertainties around the U.K.'s departure from the European Union as one reason to proceed with caution. At the Treasury, Mr. Ramsden oversaw a review of the likely consequences of Brexit that drew some gloomy conclusions about its impact on the British economy.
Some BOE watchers think that experience will make Mr. Ramsden less likely to vote for a rate rise.
"Rightly or wrongly Sir Dave Ramsden will be considered a dovish appointment as far as monetary policy is concerned in the UK," said David Owen, an economist at Jefferies.
In addition to being a deputy governor, Ms. Hogg had also been the BOE's chief operating officer. Those roles have now been separated and the BOE separately named Joanna Place to oversee the day-to-day management of the institution. Ms. Place had been acting COO since May 1.
Write to Paul Hannon at email@example.com
(END) Dow Jones Newswires
July 27, 2017 09:58 ET (13:58 GMT)