Bank’s rate team shrinks in election ‘purdah’

THE Bank of England’s rate-setting team could be down to just seven members for the first time in nearly 11 years as election “purdah” rules will delay appointments until at least next month, it has emerged.

The Bank’s Monetary Policy Committee (MPC) is already down to just eight members from the usual nine, after deputy governor Charlotte Hogg was forced to resign in March for failing to declare her brother works for Barclays.

External MPC member Kristin Forbes is also due to step down at the end of June, while chief economist Andrew Haldane’s term ends at the end of May.

The Treasury is leading the recruitment, but it has put the process on hold as it is unable to make appointments during socalled purdah rules on government announcements during the election period.

While it is expected that Mr Haldane will continue in his post until his re-appointment can be confirmed, the delay to replacements for Ms Hogg and Ms Forbes could see the smallest rates contingent since 2006.

The MPC has not been down to seven members since July and August 2006, after the unexpected death of David Walton in June 2006.

The Bank will be hoping it can have the hires in place for the rates decision on August 3, when the Bank will also release its quarterly inflation report.

The Old Lady of Threadneedle Street was left red-faced after the resignation of Ms Hogg, just two weeks after she took up the post.

A scathing verdict in a report by MPs on the Treasury Select Committee found her “professional competence falls short” of standards required for the role after the conflict of interest breach.

The omission saw her fall foul of the code of conduct rules she helped to draw up at the Bank.

Ms Hogg acted as deputy governor on top of her role as chief operating officer, but it is understood the role will now be split.

Economists will also be watching for news of the replacement for Ms Forbes, who has been the sole “hawk” voting for a rate rise for the past two decisions.

However, a recent slowdown in growth is unlikely to see MPC members join her for some time.

Experts believe rates will remain on hold until at least 2019, with official estimates showing growth being slower than believed at the start of 2017, at 0.2%.