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Bank of England appoints Professor Silvana Tenreyro to replace Kristin Forbes on MPC

The pound fell after the BoE appointed Professor Silvana Tenreyro to replace Kristin Forbes, who has argued for interest rate increases
Mark Carney
BoE Governor Mark Carney says he's looking forward to working with Silvana Tenreyro

The Bank of England has appointed Professor Silvana Tenreyro to its Monetary Policy Committee (MPC) to replace well-known hawk Kristin Forbes.

Tenreyro is an economics professor from the London School of Economics and has worked as an economist at the Federal Reserve Bank of Boston from 2002 to 2004 and served on the scientific committee of the Bank of France.

She was also an external MPC member at the Bank of Mauritius between 2012 and 2014.

Forbes, who has long-argued for an interest rate hike amid rising inflation, is stepping down on 30 June. She was one of three members who voted last week to raise rates.

“I am delighted to welcome Silvana Tenreyro to the Monetary Policy Committee and am very much looking forward to working with her,” said Bank of England Governor Mark Carney.

Pound falls as hawkish Forbes steps down...

The pound fell 0.23% to US$1.2753 in afternoon trading following the news.

Connor Campbell, financial analyst at Spreadex, said: “The currency had initially seemed pleased that Brexit negotiations had started on time, despite the recent political uncertainty threatening the start date.

“However, the appointment of Silvana Tenreyro to the Bank of England took the edge off of its gains, largely because the new Monetary Policy Committee member likely won’t be as hawkish – at least not to begin with – as the outgoing Kristen Forbes (who, remember, has voted for a rate hike for 2 months in a row).”

Tenreyro warns Brexit could impact UK economy...

Tenreyro has also previously slated Brexit and blamed “misleading politicians” for using immigration to encourage people to vote to leave the European Union.

“Immigration certainly played a role in the exit vote, and many voters (partly encouraged by misleading politicians) thought immigration was to be blamed for their problems, while those problems are more complex and date longer,” she said last July.

In February she also warned that Brexit would change many aspects of the UK economy.  

“There is still uncertainty about the scope and consequences that Brexit will have on the economy. (Let us not forget that Brexit has not happened yet!). I think the UK needs to think about industrial policy among many other policies," she said.

"It is far from clear, however, that industrial policy will solve the problems the economy will likely face or that it will be enough to boost long term growth.”

Meanwhile, deputy governor and MPC member, Charlotte Hogg, resigned in March but is yet to be replaced. This means the MPC is currently voting with eight members rather than its usual nine.

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