Election rules hit Bank’s recruitment as monetary policy committee shrinks | Business

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

The Bank’s monetary policy committee (MPC) has 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 in June, while chief economist Andrew Haldane’s term ends next week.

The Treasury has put recruiting on hold as it is unable to make appointments during so-called purdah rules on government announcements during the election period.

While it is expected that Haldane will continue in his post until his re-appointment can be confirmed, the delay to replacements for Hogg and Forbes could result in the fewest number of individuals voting on rates since 2006.

The MPC has not been down to seven members since July and August 2006 after the unexpected loss of David Walton, who voted in June 2006 and died later that month. It’s next meeting to discuss rates and release quarterly inflation report is on 3 August.

Hogg quit two weeks after she took up MPC role after a scathing report by MPs on the Treasury select committee found her “professional competence falls short” of the standards required for the role.

Her omission about her brother’s role meant she fell foul of the code of conduct rules she helped to draw up at the Bank.

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

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

Forbes has called for a rise from 0.25% to 0.5% amid fears over surging inflation, but a recent slowdown in growth is unlikely to convince fellow MPC members.

Experts believe rates will remain on hold until 2019, with the latest official estimate showing growth was even slower than first thought at the start of 2017, at 0.2%.

Investec economist Philip Shaw said while the departure of Forbes will leave the MPC without a hawk, it is unlikely to change the outlook for rates.

He said: “To our minds, the direction of the economy is pretty clear at the moment.

“I’m not sure whether the decision-making process will be sensitive to specifics of one or two new members.”

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