May 31, 2018 / 3:47 PM / in 3 months

UK names academic Haskel as new Bank of England rate-setter

LONDON (Reuters) - Academic Jonathan Haskel was named as a new Bank of England interest-rate setter on Thursday, bringing his expertise in productivity to the central bank as it tries to work out the underlying growth potential of Britain’s economy.

Professor Jonathan Haskel, who has just been appointed to the Monetary Policy Committee of the Bank of England, is seen in this undated portrait released by HM Treasury in London, Britain, May 31, 2018. Jason Alden/UK Treasury/Handout via REUTERS

The professor of economics at Imperial College Business School in London will replace Ian McCafferty, one of two BoE policymakers to have voted to raise rates recently.

Haskel would serve a three-year term as an external member of the nine-strong Monetary Policy Committee starting from Sept. 1, the British finance ministry said.

He is an expert on productivity growth, something that has been a weak spot for Britain’s economy.

“I am confident that his expertise in productivity and innovation will further sharpen the Committee’s understanding of the British economy,” finance minister Philip Hammond said.

The BoE believes Britain’s productivity growth will remain weak in the coming years, explaining its signals that borrowing costs will probably go up gradually even as the economy struggles to gain much speed ahead of Brexit.

Martin Beck, an economist with consultancy Oxford Economics, said he thought Haskel would probably have a downbeat view of how quickly Britain’s economy will grow.

He pointed to a comment by Haskel to the Financial Times as part of a survey of economists published in January in which he said wages in Britain would probably stay low because of the reduced bargaining power of workers.

Haskel’s academic work has highlighted the growing use of intangibles, such as a design and branding, that cannot be measured accurately in the production process and which could help the economy to expand more quickly than widely thought.

“Everything being equal, this would suggest that labour productivity is stronger than official estimates suggest and like Ian McCafferty, (Haskel) will vote for a rate rise when he joins the MPC,” David Owen, an economist at brokerage Jefferies, said.

Bank of England Governor Mark Carney welcomed Haskel’s appointment and said “the depth of his knowledge on productivity and innovation will be hugely valuable”.

Since February 2016, Haskel has been a non-executive director of the UK Statistics Authority. He sat on a panel for Britain’s competition watchdog between 2001 and 2010.

The Treasury said it had interviewed five candidates for the position, four of them women. The MPC has only one female member despite efforts by BoE Governor Mark Carney to promote more women to senior roles.

Earlier this month, Deputy Governor Ben Broadbent’s comment that Britain’s economy was going through a “menopausal” phase revived concerns about gender diversity at the bank. He later apologised for his poor choice of language.

“It is truly staggering that the Treasury has failed to appoint a women to this role,” said Rachel Reeves, a lawmaker from the opposition Labour Party who chairs parliament’s Business Committee.

“The fact that four women were shortlisted shows that there are plenty of capable and well qualified women but yet again the top jobs seem to be reserved for men.”

Writing by William Schomberg; Editing by Alistair Smout and Catherine Evans

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