Andy Haldane, the Bank of England’s chief economist, is leaving the central bank in June to become chief executive of the Royal Society for Arts, Manufactures and Commerce.
One of the UK’s highest-profile economists, Haldane has worked at the BoE since 1989, leading both its financial stability and monetary analysis before being appointed chief economist in 2014. Although he was not a frontrunner in the race to replace Mark Carney last year, he had been viewed as a possible successor to current governor Andrew Bailey.
However, he had increasingly ventured beyond the terrain of monetary policy, co-founding a charity, Pro Bono Economics, together with the former cabinet secretary Gus O’Donnell, and chairing the independent Industrial Strategy Council — an advisory group set up by Theresa May’s government, but disbanded last month.
He also led a BoE initiative to demystify economics by providing free teaching resources for schools, and worked with the RSA on a project to set up regional “citizens’ councils” as a tool for public engagement in economic policy.
In the last year, Haldane has been consistently more bullish than others on the BoE’s monetary policy committee about the potential for the UK economy to stage a rapid post-pandemic recovery. He warned in February that central banks were becoming too complacent about the risks of inflation, calling it a “tiger . . . stirred by the extraordinary events and policy actions of the last 12 months”.
James Smith, economist at ING, said: “Haldane’s departure means the Bank of England is losing its major — and maybe only — current hawk.
“In theory . . . this tilts the committee towards a more favourable view on negative interest rates if more stimulus were needed.”
However, Smith and other economists said Haldane’s exit was unlikely to change the immediate path of policy, with one of the MPC’s more dovish external members, Gertjan Vlieghe, also due to step down in September.
“At the margin, with the absence of Haldane, the MPC may now react to any forthcoming inflation risks a little later than it otherwise would — but only by a meeting or two at the most,” said Kallum Pickering, economist at Berenberg.
The BoE chief economist is appointed by the central bank, and so is the only member of the MPC effectively chosen by the governor — although the postholder’s position on the committee must still be formally confirmed by the Treasury.
The BoE said it would advertise for a successor externally, although the post could also go to an internal candidate. Several senior BoE positions are being filled at present, with Alex Brazier stepping down as executive director for financial stability strategy, and a vacancy for monetary analysis director.
Bailey said Haldane would be “sorely missed” as “an imaginative and creative thinker” who had helped drive forward new ways for the BoE to engage with the public.
Haldane will start in September at the RSA, a charity focused at present on projects to drive up the quality of work, and to promote sustainable practices by industry. He will succeed Matthew Taylor, who previously led a government-backed review of modern working practices.
Haldane said he was “excited to be joining another great British institution”, adding that the RSA was best placed to tackle “challenges from technology to longevity, from inequality to the environment”.