Clare Lombardelli named deputy governor of Bank of England

The Bank of England's interest rate-setting committee will have a female majority for the first time, after the appointment of a former key adviser to David Cameron and George Osborne as one of its deputy governors.

Clare Lombardelli, chief economist at the Organization for Economic Co-operation and Development (OECD), will sit on the nine-member monetary policy committee (MPC) when she joins as the Bank's next deputy governor for monetary policy.

The former Treasury official will begin her five-year term at the Bank on July 1, happening Ben Broadbentafter King Charles approved the appointment.

The MPC – created in 1997 after the central bank was independence granted by the then chancellor, Gordon Brownand headed by the governor, Andrew Bailey, will be made up of four men and five women after she takes office.

The chancellor, jeremy huntwho tapped Lombardelli for the role, said: "Clare brings significant experience to the role, addressing financial and economic issues both nationally and internationally."

His arrival will come at a crucial time for the central bank, which is under pressure to reduce the cost of borrowing to support the economy's exit from the a recession during the second half of last year. Financial markets expect the Bank to begin cutting interest rates in the summer to ease pressure on mortgage payers and indebted businesses.

Hunt said Lombardelli would also lead the response to recommendations expected next month from former U.S. Federal Reserve Chairman Ben Bernanke to improve the bank's forecasting process as well as oversight of monetary policy.

That response was expected to come from Broadbent, after sustained criticism of the central bank's ability to predict the effects the Covid pandemic and the Ukraine war would have on inflation.

Several Conservative MPs, including all-party Treasury committee chair Harriett Baldwin, have said the Bank was partly to blame for allowing inflation to rise to its highest level in 40 years after delays in rate increases. interest rates.

Jagjit Chadha, director of the National Institute for Economic and Social Research, wrote last year in the Financial Times that Threadneedle Street was “increasingly providing a kind of retirement home for former Treasury officials.”

Chadha said he was concerned that the central bank's independence was being compromised by an influx of Treasury officials, including the deputy governor, Sir Dave Ramsden, and Sam Woods, head of the Bank's regulatory arm, the Prudential Regulation Authority.

Lombardelli began her career at the Bank of England but left to join the civil service in 2005. In 2007 she was deputy director of labor market policy at the Treasury before joining Cameron at 10 Downing Street as private secretary to the Treasury. Prime Minister's economic affairs. Minister.

While in the No. 10 position, she gained first-hand experience of the debt crisis sweeping southern Europe while seconded to the International Monetary Fund, where she was part of a team based in the Greek Ministry of Finance to monitor the bailout terms during 2010 and 2011.

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In 2012 he supported Osborne as chancellor in the coalition government. Lombardelli, known as one of the architects of austerity along with Osborne's colleague Rupert Harrison, later took on a larger role as chief Treasury economist under Conservative chancellors Philip Hammond, Sajid Javid and Rishi Sunak.

His departure from the OECD early last year was seen as a blow to the UK government as he had 20 years' experience in economic analysis.

Bailey said: “I am very pleased to welcome Clare Lombardelli back to the Bank as deputy governor for monetary policy. Clare’s impressive career means she brings a huge amount of relevant experience and knowledge to the MPC and the Bank as a whole, at a time of great importance for the UK economy.”

Nick Macpherson, former permanent secretary to the Treasury, said: “Great appointment. Clare is uniquely qualified for this position and she combines analytical rigor with excellent judgment.”

Referring to critics of the Bank's record in fighting inflation, he added: "Its anti-inflationary credentials are impeccable."

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