'Orthodox' forecaster Weale first Osborne name on WPC panel

ECONOMIC forecaster Martin Weale is to become the newest member of the Bank of England's monetary policy commitee (MPC), replacing Kate Barker, who left at the end of May.

The appointment - the first by new Chancellor George Osborne - makes the MPC an all-male entity for the first time since it was created in 1997.

Weale, currently the director of think tank, the National Institute of Economic and Social Research (NIESR), which produces regular updates on British and global economic trends, will step down from his existing post immediately - and join the MPC in time for the August meeting.

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The Treasury confirmed it received 38 applications for the post, of which four were from women. Barker stepped down from the committee in May, after nine years in the role.

Osborne said: "(Weale's] experience of economic forecasting and data analysis derived from 15 years as director of the National Institute for Economic and Social Research will be extremely valuable to the committee."

Weale is though to be fairly moderate in terms of his economic thought - described as being between a "hawk" and a "dove".

The Bank has kept UK interest rates at 0.5 per cent - a record low - since May 2009 and is not expected to raise them until next year.

Weale's appointment, which takes the MPC up to its full quota of nine, comes at a time when members have voiced split opinions over interest rates for the first time in more than a year. Concerns over persistent inflation saw Andrew Sentance vote for a quarter-point rate rise at the June meeting.

But economist Simon Hayes, at Barclays Capital, said Weale's appointment was "unlikely to shift policy debate", describing the economist as "eminently orthodox".

He added that despite NIESR's slightly pessimistic outlook for UK growth, his decisions were unlikely to disagree with Bank policy.

"We do not consider that Weale has particularly strong hawkish or dovish tendencies on monetary policy," he said.

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"Weale is strong on the need for medium-term fiscal adjustment and I don't think he'll be in a rush to raise interest rates," added Brian Hilliard, UK economist at Societe Generale.

NIESR's latest forecasts for GDP are below general consensus at 1 per cent for 2010 and 2 per cent for 2011, although the group struggled with its predictions last year.

It was forced to shift its call on the trough of the recession from March to May in a climbdown on an earlier forecast.

In a television interview after last month's Budget, Weale said he did not think the scale of proposed fiscal tightening would tip the economy back into recession.

"The reduction in spending will have some impact on the economy's performance but I don't expect it to lead to a double-dip recession," he said.

"The Budget deficit has to be closed at some point - you cannot put it off forever on the grounds that the economy might never be able to stand it."

Weale has been director of NIESR since 1995 and was given a CBE for his services to economics in 1999.

The Treasury appoints the four external members of the MPC, with the remaining five positions held by full-time Bank staff. A panel made up of Dave Ramsden and Jonathan Taylor from the Treasury and Professor Tim Besley, external member to the MPC from 2006 to 2009, interviewed a shortlist of candidates and made recommendations to the Chancellor.

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