Catherine Mann, a former chief economist at the OECD, has been appointed as an external member of the Bank of England’s Monetary Policy Committee, the government announced on Tuesday.
Her three year term, which begins in September, comes at a time of change on the MPC, which is under mounting pressure to show it can keep inflation under control after failing to forecast the strength of the rebound in economic growth and prices.
The nine MPC members are increasingly split in their views on the scale of the inflationary threat.
Andrew Bailey, the BoE governor, said last month there was little sign of a persistent overshoot of the central bank’s 2 per cent inflation target.
Andy Haldane, its chief economist, has been far more hawkish, warning of “the most dangerous moment for monetary policy since inflation targeting was first introduced”. But he is set to leave the MPC and the BoE has not yet announced his replacement.
As well as announcing Mann would join the MPC, the Treasury also said Jonathan Haskel, an existing external member, had been reappointed for a second three-year term beginning in September.
The four external MPC members are meant to ensure the committee benefits from expertise from outside the BoE.
Mann, who has spent the last three years as chief economist at Citigroup, will replace Gertjan Vlieghe, one of the MPC’s more dovish members.
He argued at the height of the Covid-19 crisis that negative interest rates should be deployed by the BoE if necessary. Last month he said the first rise in rates was likely to become appropriate “only well into next year”.
Mann has not spoken publicly on the UK economic outlook recently, but published research by Citi suggests she may share some of Vlieghe’s concerns.
The investment bank has argued there are still substantial disinflationary risks, and that when the government’s furlough scheme ends in the autumn, there may be more slack visible in the economy than the BoE currently projects, which would delay the first rise in interest rates.
Mann, who is a US citizen, will be the latest in a series of international appointments to the MPC — including the former governor Mark Carney.
Mann’s move to the committee will also bring an influential female voice to the top ranks of BoE monetary policymaking.
There is currently only one woman — external member Silvana Tenreyro — on the MPC and the BoE has not yet met its 2020 target for 35 per cent of senior management positions to be held by women.
Mann studied economics at Harvard university under Janet Yellen, the US Treasury secretary, before completing her PhD at Massachusetts Institute of Technology.
Her recent research focuses on the relationships between financial markets and real economies, and on the globalisation of IT and business services.
Before her stint at Citi, she spent three years as chief economist at the OECD, the Paris based club of rich nations.
But the majority of her career has been spent in Washington, including as a senior fellow at the Peterson Institute for International Economics, a member of US president George H W Bush’s Council of Economic Advisers, and a senior economist on the Federal Reserve Board.
“Her breadth of experience across policy, research and the private sector will be immensely useful to the MPC,” said chancellor Rishi Sunak.