Carney Gets Chance to Unpick King Legacy in Economics Management

Carney Gets Chance to Unpick King Legacy in Economics Management
Mark Carney, governor of the Bank of England, walks out of a meeting during the International Monetary Fund (IMF) and World Bank Group Annual Meetings in Washington, D.C., U.S., on Friday, Oct. 11, 2013. Photographer: Andrew Harrer/Bloomberg

Bank of England Governor Mark Carney will soon get his first chance to start unpicking the legacy of his predecessor in the institution’s economics management team.

Robert Woods, head of the bank’s Conjunctural Assessment and Projections Division, which oversees production of the Monetary Policy Committee’s forecasts, will end a secondment from the U.K. Treasury early next year, according to two people with knowledge of the matter. They declined to be identified, because the matter is confidential. Yesterday was the deadline for applications to replace him.

The head of CAPD “will provide strategic oversight of the economic judgments and background analysis presented to the MPC,” according to an ad on the BOE’s website. “They will facilitate the incorporation of insights from staff, analysis and models from Monetary Analysis and the wider bank.”

The successful candidate will join an institution being reshaped by Carney. Since taking over from Mervyn King in July, the former Bank of Canada governor has made radical changes to monetary policy, altered the management structure with the appointment of Charlotte Hogg as Chief Operating Officer and brought in McKinsey & Co. to advise on the BOE’s strategy.

Woods started his secondment in October 2010. He took over the CAPD in 2012, part of an overhaul of the economics unit as King approached the final year of his term. Those staff changes took place at the head of division level that has in the past been a talent pool for promotion to the MPC.

A Bank of England spokesman declined to comment and said Woods wasn’t available to comment either.

Forecast Criticism

The division is part of the Monetary Analysis unit led by BOE Chief Economist Spencer Dale. A large part of the role is producing projections with the MPC for the bank’s quarterly Inflation Report, and Woods’s successor will have to deal with criticism of the BOE’s forecasting record after an independent study last year said its capabilities had deteriorated.

The so-called Stockton Review set out options including encouraging “more assertive” staff to challenge the “house view.” In the ad for the CAPD job, the BOE said a “key objective” will be to “continue to increase the participation of other MA Divisions in the forecast process.”

The division chief will provide the MPC with “considered and rigorous challenge on key judgments,” according to the ad.

“That’s a job for a very experienced person,” said Jens Larsen, chief European economist at RBC Capital Markets in London who previously worked at the central bank. “It’s key to the Inflation Report. Woods is one of the main interlocutors with the MPC.”

Woods previously worked at the BOE’s Macro Financial Analysis Division. Prior to his secondment, he was director of macroeconomics and chief macroeconomist at the U.K. Treasury, according to his profile on LinkedIn Corp.’s website.

His exit also gives Carney the opportunity to beef up the presence of women at a senior level at the BOE, after he said it was “striking” that there were none on the nine-member MPC.

“What we have to do at the Bank of England is grow top female economists all the way through the ranks,” he told BBC Radio in August.

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