The Bank of England’s hawkish chief economist has quit, raising questions over the speed of its future response to inflation rises.
Andy Haldane, who was overlooked in 2019 to replace Mark Carney as governor, is leaving after 32 years to run the Royal Society of Arts, Manufactures and Commerce (RSA).
Haldane, 53, had been one of the more bullish members of the bank’s nine-strong monetary policy committee (MPC), which sets interest rates, as well as one of its most colourful public speakers. Senior economists said that his absence from the committee may result in more “dovish” decisions and a slower response, through the raising of interest rates, to inflation risks.
During his tenure Haldane had stood out as an imaginative and, to some, maverick thinker in the staid world of central banking. He was the architect of such phrases as “V-shaped recovery”, which was his prediction last July for the British economy’s response to the pandemic.
In February he compared the economy to a “coiled spring” that would rebound when restrictions were lifted. He has also warned of the prospect of higher inflation when the lockdown ends. He described the bank yesterday as a “fantastic institution”, adding that he had loved his “32 years in public service there”. He said: “I will miss hugely my brilliant colleagues and friends but know that, under Andrew [Bailey]’s exceptional leadership, they will continue to serve the people of the UK with distinction.”
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Bailey, 62, the former chief executive of the Financial Conduct Authority who succeeded Carney as governor, said that Haldane would be “sorely missed”, adding: “Andy has been an exemplary public servant, making major contributions to work in financial stability and monetary policymaking.”
Haldane rose to prominence with his work on financial stability, becoming executive director of that department in 2009, before taking over as chief economist in 2014. That year Time magazine named him as one of the 100 most influential people in the world.
Haldane, who was once described on the front page of the Daily Mail as Mr Boom, has attracted criticism with his colourful phrases and hawkish views.
Yesterday the former MPC member David Blanchflower claimed in The Guardian that “most of what he [Haldane] said was based on wild guesses and wishful thinking”. He added: “It’s not what you’d expect from a chief economist, but what you might expect from a commentator on a news programme.”
In 2009 Haldane co-founded Pro Bono Economics, an independent charity chaired by the former cabinet secretary Lord O’Donnell, with a mission to use economics to empower the social sector and to increase wellbeing in the UK.
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Haldane will succeed Matthew Taylor, 60, as chief executive of the RSA. The organisation was founded in 1754 by William Shipley, a painter and social entrepreneur, with an ambition to “embolden enterprise, enlarge science, refine art, improve our manufacturers and extend our commerce”. It was granted a royal charter in 1847.
The RSA said that it was delighted to welcome Haldane to the organisation. “The context for Andy’s appointment is that we are at a moment of historic significance,” a spokesperson said. “Covid and deep-seated inequalities — and in the UK, Brexit — require powerful and creative thinking, and practical solutions capable of global application. Change must come if lives are to be improved and the planet’s future secured.”
After more than three decades at the Bank, Haldane will step down after the monetary policy committee’s meeting in June. He will take up his position at the Royal Society of Arts, Manufactures and Commerce (RSA) in September.
Profile
For someone who has spent his entire career inside the hallowed halls of the Bank of England, Andy Haldane has shown a fondness for eye-catching pronouncements and politics (Katherine Griffiths and Gurpreet Narwan write).
In 2010 the Yorkshire-born economist co-wrote a report called The Future of Finance with Lord Turner of Ecchinswell, which questioned how much value had been created by the explosive growth of finance in the previous 30 years.
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Discussing the causes of the financial crash in 2011, he said that the Occupy movement was “persuasive and right” when it was laying siege to the area around St Paul’s Cathedral in the City in protest against the cost of the crisis.
The next year he made headlines with his speech The Dog and the Frisbee at the central bankers’ conference at Jackson Hole, Wyoming, which argued that simple, effective regulations were best for complex problems.
After taking over as chief economist in 2014, he quickly made his mark. He often looked to disciplines outside economics for insights and would invite poets, artists and musicians to the Bank. Grayson Perry and Simon Armitage are among those to have helped staff to tap their “wellspring of creativity”.
Seen by many as the “arch-hawk” in favour of higher interest rates on the Bank’s rate-setting monetary policy committee, Haldane has been upbeat about the economy’s prospects of emerging from the pandemic in good shape and has criticised media reports that he felt had a “Chicken Licken” focus on negative economic developments.
