Bank of England reshuffle sees Hogg promoted as hawkish Forbes departs

The Treasury has promoted Charlotte Hogg, currently chief operating officer, as deputy governor for markets and banking at the Bank of England, and revealed the hawkish Kristin Forbes will also step down from the Monetary Policy Committee at the end of June.

The appointment of Hogg, a former Santander UK and Experian director, to succeed the departing Minouche Shafik on the Monetary Policy Committee as a deputy governor.

But it was the departure of Professor Forbes that had economists interested, as was said to have potentially significant implications for interest rate prospects.

In August she was the only MPC member to vote against the BoE buying corporate bonds and she was also one of three MPC members voting against the buying of gilts and earlier this week gave a speech indicating that she was getting twitchy over the Bank’s policy stance, given the expected inflation overshoot and the current resilience of the economy and jobs.

As well as keeping her COO role and joining the MPC, Hogg will also sit on the Financial Policy Committee, the Prudential Regulation Committee and the Court of the Bank of England.

Bank Governor Mark Carney said: "Many of the top priorities in markets and banking currently coincide with those of the Bank’s central operational areas, meaning Charlotte is the ideal person to lead these efforts.

"Charlotte’s breadth of financial sector and operational experience will contribute valuable, broader perspectives to the Bank’s policy committees."

Having recommended Hogg for the role, Chancellor Philip Hammond said she had done an "excellent job" as the Bank’s first COO.

"I’m confident that her exceptional leadership skills and wide-ranging experience make her the right person to take on the position," he said, as well as thanking Shafik as she moves into a new role as director of the London School of Economics.

Economist Howard Archer at IHS Global Insight Forbes departure "could have significant implications for interest rate prospects" as she has consistently been among the most hawkish MPC members.

Being more explicit he said it "could modestly dilute the possibility of interest rates rising sooner rather than later – although much will obviously depend on who replaces her on the MPC", as well as the larger economic driving forces of inflation, growth and jobs over the coming months.

Earlier this week, Forbes stated that "if the economy remains solid and the pick-up in the nominal data continues, this could soon suggest an increase in Bank Rate" and that "I believe that the MPC should be nimble and willing to quickly adjust the appropriate path for monetary policy in either direction as needed throughout this period - even if it means reversing recent adjustments to Bank Rate."