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EDITIONS
Tuesday, 18 February, 2003, 21:41 GMT
Who's Who at the MPC
Bank of England Monetary Policy Committee, October 2002
Bank of England MPC meeting, October 2002
Every month, the fate of the nation's interest rates is determined by nine people, the Bank of England's Monetary Policy Committee. Their decision is by no means always unanimous. Our Economics Reporter Dharshini David takes a look at the very different personalities who make up the committee.

The Bank was charged with setting rates by the Chancellor on 6th May 1997. Its objective is to meet the government's inflation target, currently 2.5% on the underlying RPIX measure, which excludes mortgage interest payments.

It has a "symmetrical target," that is, it is charged with ensuring that inflation is within 1% of the target rate, and that it does not fall too low as well as not rising too high.

The Monetary Policy Committee (MPC) meets on the Wednesday and Thursday in the first full week of the month.

The nine-strong panel decides on the direction of interest rates, on a one-person one-vote basis.

In the event of no majority, the Governor of the Bank has the casting vote. The decision is announced at noon on Thursday, and minutes of the meeting, with details of the vote, are published two weeks later.

The MPC consists of five senior Bank officials, and four external "experts" who are appointed by the Chancellor.

Over time, the members tend to earn a reputation for being either an inflation dove - confident that inflation will remain low and hence favouring lower interest rates or a hawk - fearing rising inflation and preferring higher rates.

Although members of the panel tend to express sharply differing views, it is worth noting that these tend to boil down to arguing for or against an 0.25% change in interest rates. In other words, as far as policy is concerned anyway, the differences are not huge.

At present, the panel comprises:

Bank officials:

Sir Eddie George, Governor (appointed until June 2003)

Sir Eddie George, Governor, Bank of England
Sir Eddie George, Governor, Bank of England

Sir Edward has presided over the MPC since its inception. He is generally viewed as an inflation pragmatist.

All rate decisions have been in line with his views so far, and he has had to use his casting vote on only a handful of occasions.

Mr Mervyn King, Deputy Governor (appointed until May 2003)

Prior to being appointed deputy Governor, Mr King was the Bank's Chief Economist, and still presents the Bank's quarterly inflation report.

Mervyn King, Deputy Governor, Bank of England
Mervyn King, Deputy Governor, Bank of England

He is probably the most hawkish member of the MPC, and has voiced fears over the inflationary implications of a tight labour market. His views are highly respected and many consider him to be the governor-in- waiting.

Professor King was previously a specialist in tax and financial markets at the London School of Economics.

Sir Andrew Large, Deputy Governor. (appointed 3 September 2002 - 2 September 2007).

A veteran City Banker, who was previously deputy Chairman of Barclays.

Andrew Large: Deputy Governor
Before joining Barclays in 1998, Sir Andrew was chairman of the securities and investment board, predecessor to the FSA as City watchdog. He was educated at Cambridge

Having joined very recently, it is difficult to judge his stance, but he expected to follow the leader of the Governor.

The process of his appointment - which was announced after his predecessor's term of office had already expired - has been criticised by the Treasury select committee, who expressed surprise that the Treasury did not seem to have noticed that there was a vacancy to fill until the last minute.

Mr Charles Bean, Chief Economist (appointed June 2001 to May 2004)

Charles Bean,  Chief Economist
Charles Bean, Bank of England Chief Economist

Mr Bean was previously Professor of Economics at London School of Economics and policy adviser to both the Treasury and Parliament.

He replaced John Vickers, who has moved to head the Office of Fair Trading.

So far he has voted broadly in line with the pragmatists, such as Sir Edward.

He is a former colleague of Mr King's from the London School of School of Economics, where he ran the Centre for Economic Performance, which had a particular interest in productivity.

Mr Paul Tucker, Executive Director for Financial Stability (appointed from June 2002 to May 2005)

Paul Tucker replaced Ian Plenderleith as the Bank's fourth representative on the MPC in 2002.

He is no stranger to the institution, serving as the secretary to the MPC since its creation.

Aged 44, he is a Bank high-flyer, having served as private secretary to the previous governor and member of the team that drew up the Basel accords on international bank regulation.

He is expected to follow the Bank consensus on interest rates.

External Members

Kate Barker ( appointment from June 2001 to May 2004)

Kate Barker was previously chief economic adviser to the Confederation of British Industry ( CBI), and hold what is widely perceived as the "industry seat" on the MPC.

Judging from comments made while she was at the CBI and since she joined the MPC, she is perceived to a dove, like her predecessor, DeAnne Julius (a former chief economist at British Airways).

He preference for lower interest rates in the October 2002 MPC vote suggests she is still sympathetic to the plight of industry.

Before joining the CBI in 1994, Ms Barker was chief economist at Ford Europe for nine years.

. This is her second stint as an economic adviser to a UK government, having been one of Chancellor Kenneth Clarke's Independent Economic Advisers in 1996 to 1997, a so-called "wise-man".

Ms Barker studied at Oxford.

Professor Stephen Nickell.(appointed June 2000 to May 2003)

Professor Stephen Nickell, External Member, MPC
Professor Stephen Nickell, External Member, MPC

Professor Nickell still works part-time as Professor of Economics at the LSE, and has a special interest in labour market issues.

His preference for higher rates last summer, in the first few months of his appointment, suggested that he might be a recruit to the Hawks camp. He has expressed fears about how long the labour market can go on tightening without risking higher inflation.

Nevertheless, this October, he was one of three members seeking a cut in interest rates, suggesting his views may have shifted.

He, along with Mr Allsopp, is the leading Keynesian in the MPC, and is now probably worried about the decline of world demand due to economic weakness in the US, Japan, and Europe.

Mr Christopher Allsopp (appointed June 2000 to May 2003)

Mr Allsopp was previously a Reader in Economics at New College, Oxford and a member of the Bank's Court of Directors. His expertise is in economic forecasting.

Christopher Allsopp, external member, MPC
Christopher Allsopp, external member, MPC
Since he joined, he has leaned towards a "dove" position on interest rates, joining former MPC member Sushil Wadhwani on several occasions in calling for faster rate cuts.

He had a difficult time with the House of Commons Select Committee, which questioned his appointment to the MPC at his confirmation hearings.

He is a former colleague of Professor Nickell, and is believed to share his Keynesian views.

Marian Bell ( appointed June 2002 to May 2005)

In 2002 the MPC got its second women member when the Chancellor appointed Marian Bell to replace Sushil Wadwhani as one of its four independent members.

Marian Bell is a well-known and respected commentator on economic affairs who spent most of her career at the Royal Bank of Scotland (now merged with NatWest).

She left two years ago to set up her own consultancy firm, Alpha Economics.

Ms Bell, who studied at Oxford and Birkbeck College of the University of London, was also a Treasury economic adviser between l989 and 1991.

Part of the reason for her appointment was her close links with the City and financial institutions, and she was expected to be a mild "hawk" on interest rates and inflation.

So far, however, she has voted with the consensus.

See also:

31 Oct 00 | Business
02 Nov 00 | Business
18 Oct 00 | Business
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