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Claire Lombardelli, the OECD’s chief economist, has been appointed deputy governor of the Bank of England, tasked with reforming monetary policy to quell a long-anticipated rise in inflation.
The former Treasury official will replace Ben Broadbent when his term ends on July 1, the government announced on Thursday. He joins the central bank at a key turning point as it seeks to rein in the inflationary phenomenon that pushed headline price increases into double digits after the coronavirus lockdown was lifted.
Economists widely expect the Bank of England to start cutting interest rates later this year, but the central bank is still grappling with persistent elements of inflation, particularly rising prices for domestically produced services.
Earlier this month, Mr. Lombardelli told the Financial Times that while inflation now appears to be receding in major economies, “we are not out of the woods yet and there is plenty of ways to go.” UK inflation remained flat at 4% in January.
Mr. Lombardelli took over the OECD role in May 2023. Prior to joining the Paris-based organization, Mr. Lombardelli served as chief economic advisor and co-head of the government’s economic department at the Treasury Department.
“The challenge she faces is trying to shift the central bank’s approach to its core business of steering monetary policy,” said Neville Hill, co-founder of consultancy Hybrid Economics.
“They need a new set of eyes on how the BOE thinks about inflation risk, how it expresses it, and how it deals with difficulties in achieving its inflation target. “We are in a world where inflation is likely to be more volatile than in the past,” he added.
The appointment further expands the trend of former top Treasury civil servants taking up senior positions at the BoE.
Last year, the House of Lords Economics Committee called for a review of how central bank executives are appointed, noting that three of the central bank’s deputy governors had previously worked at the Treasury, including the recently retired Sir John Cunliffe. I asked for it.
“There is no doubt that they are competent, but this does not strengthen the perception of independence,” Lord Rose said at the time.
Lombardelli’s duties when he takes over include implementing reforms to the Bank of England’s forecasting methodology following former Fed Chairman Ben Bernanke’s review of the BoE’s forecasting methodology, expected to be announced in April.
The bank said in a statement that he will also be responsible for the central bank’s research agenda and new data and analytics strategy.
The appointment was made by Prime Minister Jeremy Hunt, who said: “Mr Clare brings significant experience to the role of addressing financial and economic issues at home and abroad.”
Central Bank Governor Andrew Bailey said: “Clare’s distinguished career has seen her bring vast relevant experience and expertise to the Monetary Policy Committee, and to the wider central bank, at a crucial time for the UK economy. means,” he said.
Mr. Lombardelli started his career at the central bank and has also worked at the IMF. She also served as an economic adviser to David Cameron as Prime Minister.
Her term of office is five years. Broadbent, who is currently deputy governor for monetary policy, has been working at the BoE since 2014.
