MNI ANALYSIS: BOE MPC Changes Loom; Broadbent's Star Fades

By David Robinson

     LONDON (MNI) - Three members of the nine-strong Bank of England Monetary

Policy Committee (MPC) could depart in little over a year, with the battle to

succeed Governor Mark Carney next summer fuelling the instability.

     Deputy Governor Monetary Policy Ben Broadbent, previously tipped as one of

the insiders in the running for the governorship, did his reputation no good

this week when he was forced to publicly apologise for describing the UK

economy, stuck in a prolonged low productivity phase, as "menopausal." He

sparked charges of ageism and sexism and the furore has bolstered the case to

appoint the Bank's first female head.

     Speculation over who will take over from Carney has yet to coalesce around

a single name. If his successor were to be female the picture is clouded because

inside the Bank there are currently no women among the four deputy governors at

the Bank. 

     --INSIDE CANDIDATES

     Amongst the highest ranking women currently on the staff at Threadneedle

Street is Vicky Saporta, an executive director on the prudential policy side.

     Saporta reports in to both Jon Cunliffe, Deputy Governor Financial

Stability, and Sam Woods, Deputy Governor Prudential Regulation. Cunliffe's term

on the MPC is set to expire on 31 October this year and before then, in June, he

turns 65, reaching state retirement age.

     External member Ian McCafferty will leave the MPC at the end of August and

if Cunliffe does depart at the end of his term that would free up another place

on the committee. Carney would become the third to leave when he goes at the end

of June 2019. 

     At first glance Saporta would be well-placed to pitch for Cunliffe's job.

But even then she would be up against some formidable insiders on the financial

stability wing, not least Alex Brazier, Executive Director, Financial Stability

Strategy and Risk. 

     Brazier, formerly Carney's Principal Private Secretary, handled the

transition from former Governor Mervyn King to the current governor and is

viewed as a powerful figure inside the Bank and is a strikingly assured and

well-informed in his public appearances.

     Another woman just below Deputy Governor level on the Bank's organigram is

Victoria Cleland, the former chief cashier who is also now at executive director

level, with responsibility for Banking, Payments and Financial Resilience.

     Joanna Place, currently the Bank's Chief Operating Officer, is also an

executive director, with a mainly administrative background at the bank.

     --OUTSIDERS

     Unsurprisingly, in informal conversations among those familiar with the

Bank, the names of women cited as plausible successors to Carney have all

instead been outsiders. 

     One such name is Shriti Vadera, currently chairwoman of bank Santander. She

was at the heart of the rescue operation for British banks after the global

financial crisis hit hard and she has spearheaded the City's Brexit lobbying and

advisory group, the European Financial Service Chairmen's Advisory Committee.

     Sharon White, a former top rank Treasury official now heading broadcast and

telecommunications regulator Ofcom, is another name that crops up.

     The governor of the Bank is, technically, a crown appointment and in

practice comes down to the judgement of a combination of the Prime Minister and

the Chancellor of the Exchequer (Treasury head) while external MPC appointments

are driven by the Chancellor and his or her senior officials.

     With the government riven by infighting over the direction of Brexit

policy, current Chancellor, Philip Hammond, is not guaranteed to be around to

sway the decision on Carney's replacement. As a leading soft-Brexit supporter

Hammond has, however, proved remarkably resilient in his post.

     Carney was the 120th man to hold the position, and first non-British

national, when appointed Governor, by Hammond's predecessor George Osborne. If

Hammond is still in place he will have the chance to break with precedent a

second time and appoint a woman -- but whatever he decides a shake-up on the MPC

is looming.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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