(Recasts, adds details, economist comment)
By David Milliken and Andy Bruce
LONDON, April 11 (Reuters) - The Bank of England will
soon add Megan Greene, global chief economist of risk management
firm Kroll, to its panel of interest rate-setters, replacing
Silvana Tenreyro whose term ends in July, Britain's finance
ministry said on Tuesday.
The hiring of Greene, who spoke recently about the need for
higher BoE rates, could shift the debate on the Monetary Policy
Committee (MPC) in a more hawkish direction, with the outgoing
Tenreyro talking about rate cuts.
"While we don't know too much about Ms Greene's stance on
monetary policy, we can say one thing: it will be hard for
anyone to be more dovish than Ms Tenreyro," said HSBC economist
Elizabeth Martins.
Greene's appointment adds a policymaker with financial
markets experience to the MPC, after the most recent previous
appointment saw former Citi economist Michael Saunders replaced
by London School of Economics academic Swati Dhingra.
Before working at Kroll, Greene was global chief economist
at Manulife Asset Management and head of European economics at
Roubini Global Economics.
In a presentation to investors last month, Greene described
the economic fundamentals of Britain's economy as "quite
worrying" and warned that a recession was likely.
She said the BoE would need to keep hiking interest rates
after March because of strong wage growth and poor productivity
- in contrast to Tenreyro who has recently warned the BoE would
need to cut rates sooner than previously thought.
"I actually think that Bank of England will end up having to
hike more to bring inflation back in line with their target...
so the UK has got a tough challenge," she said.
STRUCTURAL BREAK
Like most economists, Greene said Britain's departure from
the European Union had hurt business investment, citing "the
second the Brexit referendum hit" as a major structural break
for the economy.
"Megan Greene's wide experience across financial markets and
the real economy will bring valuable new expertise to the MPC,"
finance minister Jeremy Hunt said in the announcement on
Tuesday.
Greene studied for an undergraduate degree at Princeton
University and has a masters from the University of Oxford.
Kroll currently lists her as working in New York.
She is also a fellow at Brown University in the United
States and Britain's Chatham House foreign policy think-tank.
Tenreyro, a professor at the London School of Economics,
joined the MPC in July 2017 and will soon have completed her
second three-year term, the maximum for an external member of
the committee.
The BoE has raised borrowing costs 11 times since December
2021, taking Bank Rate to 4.25% from 0.1% as it tried to keep a
lid on inflation and return it to its 2% target.
Consumer price inflation peaked at a 41-year high of 11.1%
in October and was still in double digits when February data was
released last month. The BoE expects CPI to fall sharply in the
current quarter and to be below 4% by the end of this year.
(Writing by David Milliken, editing by Andy Bruce, William
Schomberg and Alex Richardson)
