The chancellor has appointed former White House adviser and Citigroup chief economist Catherine Mann to the Bank of England’s monetary policy committee, in a move that ensures two of the nine individuals responsible for setting the country’s interest rates will now be women.
The Treasury announced on Tuesday that Mann, who has previously warned about the economic harms that could be caused by austerity and Brexit, has been appointed for a three-year term as an external committee member beginning on 1 September.
Oversight of interest rates gives the monetary policy committee (MPC) huge influence over the lives of British people and businesses and borrowers, but the Treasury and the Bank have faced persistent criticism over the lack of diversity in their appointments. There have been only eight women out of 44 members who have sat on the committee since the Bank was given responsibility for setting interest rates by the Labour chancellor Gordon Brown in 1997.
Jonathan Haskel was reappointed on Tuesday for another three-year term as an external member. Haskel was the only man on a shortlist of five when he was appointed in 2018.
At the MPC’s next meeting on Thursday there will be only one woman – external member Silvana Tenreyro – out of nine voting members. Mann’s addition will mean there will be at least two women on the committee until 2023, when Tenreyro’s term expires.
The Treasury will have another opportunity to redress the balance when it finds a replacement for Andy Haldane, the Bank’s chief economist who will step down this week to become chief executive of the Royal Society of Arts thinktank.
Mann will replace Gertjan Vlieghe, generally considered as one of the more dovish members in favour of supporting the economy, who served on the committee from September 2015.
Simon French, chief economist at Panmure Gordon, a stockbroker, said Mann’s appointment was unlikely to shift the balance of the MPC. “She’s not an ideologue,” he said. “From everything we know, she’s pretty centrist. She’ll be pretty data-led.”
However, French added that her experience could enable the MPC to consider issues such as financial stability or inequality, potentially broadening the perspective on a committee that has tended to look at monetary policy’s effects in isolation.
She has experience in the corridors of power in the private and public sectors ranging from the White House to the US Federal Reserve. Bank governor Andrew Bailey praised her “international policy experience, and breadth of research”.
She worked for three years up to May at Citigroup, a large US bank. Another member of the MPC, Michael Saunders, is also an alumnus of Citi.
Mann worked from 2014 to 2017 as chief economist at the Organisation for Economic Co-operation and Development (OECD), the Paris-based club of mostly rich nations that is an influential adviser on economic policy.
She was in charge of the OECD’s reviews of economic policy and was instrumental in revising its attitude to the public sector spending cuts popular with Conservative parties across Europe after the 2008 banking crash. Her Italian predecessor at the OECD, Pier Carlo Padoan, had initially supported George Osborne and his counterpart in Germany, Wolfgang Schäuble, and their austerity programmes, before urging them to temper the cuts during the euro crisis of 2012.
Deploying Keynesian economic theory, Mann highlighted the lack of business investment and persistent low productivity that kept down wages and held back growth. Two years into her tenure she executed a complete turnaround in the OECD’s policy, urging the world’s richest countries to increase spending and take on more debt, even where debt burdens were already elevated relative to GDP.
Mann also oversaw OECD analysis that contained strident warnings that Brexit would damage the UK economy. Brexit would leave the UK worse off than Europe, she said before the 2016 referendum. That analysis meant the OECD was regularly included among the “organisations with acronyms saying that they know what is best” targeted by the Cabinet Office minister, Michael Gove, when he infamously said the UK had “had enough of experts”.
Mann, a US citizen, holds a PhD in economics from the Massachusetts Institute of Technology – where Nobel prizewinner Paul Krugman sat on her thesis committee – as well as a bachelor’s degree in economics from Harvard University.
In her early career she worked on the White House’s council of economic advisers under President George HW Bush, as well as at the World Bank, before switching back and forth through academia and thinktanks including Vanderbilt University, the Peterson Institute for International Economics, and Brandeis University.