By Laurie Laird
— Chief Economist Andy Haldane will depart in June
LONDON (MaceNews) — Bank of England Chief Economist Andy Haldane will leave the Bank’s Monetary Policy Committee at the end of June, robbing the rate-setting body of one of its most hawkish voices.
After 32 years at the Bank, Haldane will take over the chief executive role at the Royal Society for Arts, Manufactures and Commerce (RSA) in September.
Haldane has been the most publicly optimistic member of the MPC, predicting a rapid economic recovery that could reignite inflation in the UK. “Inflation is the tiger whose tail central banks control … the greater risk at present is of central bank complacency allowing the inflation (big) cat out of the bag,” he said in February.
Haldane’s fears do not appear to reflect the consensus view of the MPC, which expects consumer price inflation to “return to the 2% target in the spring,” remaining near that level for the next two years. Inflation slipped to an annual rate of 0.4% in February, falling below the Bank’s 2.0% target for the 19-straight month, while core inflation declined to 0.9%. March data are due on Wednesday, March 21st.
Meanwhile, output rose by a lower-than-expected 0.4% between January and February, according to data released Tuesday morning, leaving GDP 7.8% below its level of February last year. But GDP could exceed the BoE’s February forecast of a 4% fall in the first quarter, after January output was revised upward.
The MPC discussed “a material degree of spare capacity” according to minutes of its March meeting, and a handful of external members, including Silvana Tenreyro and Gertjan Vlieghe, have held out the possibility of a move to negative interest rates. However, the MPC has given banks a preparation period before considering sub-zero rates, leaving the measure off the agenda until the August rate-setting meeting. Haldane will attend MPC meetings in early May and late June before leaving the Bank.
The BoE revealed no information about Haldane’s replacement as chief economist, saying only that the “Bank will advertise for a successor … in due course.”
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Contact this reporter: laurie@macenews.com.
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