New BoE Appointees Will Strengthen Carney

A shake-up of Britain’s top monetary policymakers, which started this week, caps a year of change at the Bank of England under Governor Mark Carney and might help him withstand growing pressure to raise interest rates.

Adding to a host of new faces already at the Bank, three of the nine seats on its interest rate-setting committee are due to change hands between June and August, beginning with BoE banking expert Andy Haldane. He attends his first rate-setting meeting this Wednesday after starting this week as BoE chief economist.

Like Haldane, the two other new policymakers – U.S. academic Kristin Forbes and Nemat Shafik, a top International Monetary Fund official – fit well with Carney’s broader focus on the influence of finance on the economy.

But as “outsiders”, Forbes and Shafik have not followed Britain closely. This has raised questions about how likely they may be to challenge Carney – at least initially – on the need to keep interest rates at rock bottom as the country’s economy recovers strongly.

    “They probably aren’t as well versed in the intricacies of monetary policy or the situation in the UK,” said Peter Dixon, an economist with Commerzbank in London.

    “Consequently they are going to take a bit of time to find their feet. That might just be sufficient to allow Mr Carney, should he wish to do, to prevail in his view that rates don’t need to rise any time soon.”

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza