Megan Greene to join BoE’s monetary policy committee

theguardian.com:

The Treasury has appointed a financial markets expert to the Bank of England’s monetary policy committee, replacing the interest rate-setting panel’s most dovish member as it responds to the worst banking crisis since 2008.

Megan Greene, the global chief economist at Kroll, a US private investigations and financial advisory firm, will join the MPC as an external member on a three-year term starting on 5 July.

She replaces outgoing external economist Silvana Tenreyro, who has warned against raising interest rates further as households and businesses come under increasing pressure from higher borrowing costs. Economists consider her as a leading “dove” on the nine-strong panel, meaning she advocates for lower rates to support jobs and growth.

Greene, who has a breadth of experience working in financial services, joins the committee at a delicate moment after11 successive rate increases in the MPC’s most aggressive response to inflation in its history.

Financial markets expect at least one more rate increase from the current level of 4.25%. However, Tenreyro has warned rate cuts could be required as the impact from previous hikes weighs on the economy.

The appointment of a financial markets expert comes as central banks around the world consider the impact from recent turmoil in the banking sector triggered by the collapse of the US technology lender Silicon Valley Bank and the Swiss government-brokered takeover of Credit Suisse by UBS.

Economists have warned the turbulence could further drive up borrowing costs for businesses and households, adding to impact from higher rates. Threadneedle Street is expected to publish an initial assessment at the MPC’s next meeting on 11 May.

The chancellor, Jeremy Hunt, said Greene’s experience