Clare Lombardelli named deputy governor of Bank of England
A former Treasury official and key adviser to David Cameron and George Osborne has been appointed as a deputy governor of the Bank of England, in a move that will make its interest-ratesetting committee majority female for the first time in its history.
Clare Lombardelli, the chief economist at the Organisation 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.
Lombardelli, who was appointed by the chancellor, Jeremy Hunt, will start a five-year term at the Bank on 1 July, succeeding Ben Broadbent. King Charles has approved the appointment, the Bank said.
The MPC, which was created in 1997 after the central bank was given independence by the then chancellor Gordon Brown, will comprise four men and five women after Broadbent’s departure. It is led by the Bank’s governor, Andrew Bailey.
Hunt said: “Clare brings significant experience to the role, tackling financial and economic issues both domestically and internationally.”
Her arrival will be at a crucial time for the central bank, which is under pressure to cut the cost of borrowing to support the economy’s exit from a recession during the second half of 2023. Financial markets expect the Bank to begin cutting interest rates in the summer to ease pressure on mortgage payers and indebted businesses.
The chancellor said Lombardelli would also lead the response to recommendations expected next month from the former US Federal Reserve chair Ben Bernanke to improve the BoE’s forecasting process, as well as overseeing monetary policy.
The response was expected to come from Broadbent after sustained criticism of the Bank’s ability to judge the effects on inflation of the Covid pandemic and the Ukraine war on inflation.
Several Conservative MPs, including the chair of the all-party Treasury committee, Harriett Baldwin, have said the Bank carried some of the blame for allowing inflation to rise to its highest level in 40 years after delays to interest rate increases.
Lombardelli started her career at the Bank of England and has also worked in 10 Downing Street as the private secretary for economic affairs to the prime minister.
She was a key adviser to Cameron before Osborne as chancellor in the coalition government, before taking up more a senior role under Philip Hammond, Sajid Javid and Rishi Sunak.
Before that, she was seconded to the International Monetary Fund where she was part of a team based in the Greek finance ministry to monitor bailout terms during 2010 and 2011.
Her departure to the OECD early last year had been seen as a blow to the UK government, as she had 20 years of experience in economic analysis culminating in a long stint as the Treasury’s chief economic adviser.
Bailey said: “I’m really 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 expertise to the MPC, and the Bank more broadly, at a time of great importance for the UK economy.”
Nick Macpherson, a former Treasury permanent secretary, said: “Great appointment. Clare is uniquely qualified for this post, combining analytics rigour with excellent judgment. Her anti-inflationary credentials are impeccable.”