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19 March 2009

Appointment to Monetary Policy Committee

The Chancellor of the Exchequer today announced that David Miles has been appointed to succeed David Blanchflower as an external member on the Monetary Policy Committee (MPC). The appointment, which was made in accordance with the new process for external MPC appointments announced by the Chancellor in June 2008, will take effect on 1 June 2009.

The Chancellor said:

“I am delighted that David Miles has agreed to join the Monetary Policy Committee. His considerable experience analysing the interaction between financial markets and the economy will be extremely valuable to the Committee.” 

Separately, Tim Besley has announced that he is not seeking reappointment to the MPC when his term expires on 31 August 2009. His position on the MPC will be advertised shortly.

In a letter to the Chancellor, Tim Besley said:

“While I have greatly valued the experience thus far, I have decided not to pursue an additional three-year term on the MPC so that I can concentrate on my academic career.”

In his reply to Tim Besley, the Chancellor said:

“I would like to take this opportunity to thank you for your major contribution to the work of the committee since 2006. It is extremely important that that the committee contains a range of experts that energetically put forward challenging analysis and views to help shape the debate.”

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Notes for Editors

  1. Professor David Miles has been Chief UK Economist at Morgan Stanley since September 2004. He is also a Visiting Professor at Imperial College. Miles was formerly a professor of financial economics and head of the Finance Department at Imperial. He has been a specialist economic advisor to the Treasury Select Committee. In Budget 2003, the Chancellor commissioned Professor Miles to lead a review of the UK mortgage market. The result, published at Budget 2004, was the report: "The UK mortgage market: taking a longer-term view". He is a council member of the Royal Economic Society, a research fellow of the Centre for Economic Policy Research and at the CESIFO research institute in Munich. He is a former editor of "Fiscal Studies".
  2. The MPC makes decisions about the operation of monetary policy. It comprises the Governor of the Bank of England, the two deputy Governors, two members of the Bank with responsibility in the Bank for monetary policy and market operations and four outside members with relevant expertise who are appointed by the Chancellor. The appointment of external members is designed to ensure that the MPC benefits from thinking and expertise in addition to that gained inside the Bank of England. The Chancellor announced the establishment of the MPC as part of the new framework for monetary policy on 6 May 1997.
  3. The Chancellor set out measures to strengthen the procedure for future appointments to the MPC in a letter to the Treasury Select Committee in June 2008. These included a commitment to advertise vacancies for the Governor and Deputy Governors of the Bank of England and also for external members of the MPC, consistent with the principles of open competition. Further details are set out in the Chancellor´s letter to the Treasury Select Committee. 
  4. Professor David Blanchflower’s position was advertised in the media in January 2009. A panel comprising Sir Nicholas Macpherson and Dave Ramsden from the Treasury and Professor Stephen Nickell, Warden of Nuffield College and former external member of the MPC, interviewed a number of candidates and made recommendations to the Chancellor, which informed his decision. 
  5. Future vacancies on the Monetary Policy Committee will continue to be advertised.

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