Ben Broadbent, a Goldman Sachs economist, will join the Bank of England’s interest rate-setting committee this summer, replacing the hawkish Andrew Sentance.
Mr Sentance, who is due to step down from the Monetary Policy Committee at the end of May, has established himself as the leading proponent of higher interest rates on a committee that recently has been more deeply split than at any other time in its 13-year history. Mr Broadbent, who will join the MPC in June, has been optimistic about the strength of Britain’s recovery and his most recent analysis suggests he may also bring a relatively hawkish approach to monetary policy.
In his note dated March 6, he predicted three rate increases this year and argued that concerns about the ability of heavily indebted British households to weather higher borrowing costs was “exaggerated”.
Mr Broadbent was chosen by George Osborne from a field of 27 applicants. The decision means the nine-strong MPC will remain an all-male committee, but the Treasury said that only one woman had applied.
Robert Barrie, chief European economist at Credit Suisse, said that it was an “excellent appointment ... This has been a stronger recovery than most people expected and Ben was the right side of that.”
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However, Mr Barrie added that the departure of Mr Sentance, a former chief economist at British Airways, would leave the MPC lacking in members with experience from the non-financial business world.
Mr Broadbent, 46, is a former assistant professor at Columbia University and worked at the Treasury and the Bank of England before joining Goldman Sachs in 2000.
He is on gardening leave from Goldman Sachs before taking up his new part-time post. He will be paid £131,771 for the three-day-a-week job, joining Adam Posen, Martin Weale and the former Morgan Stanley economist David Miles as an external MPC member.
Mr Osborne said: “His broad professional experience in the financial sector and academia, as well as his detailed knowledge of the UK economy, will be extremely valuable to the committee.”