Ian McCafferty, one of two Bank of England policy makers who probably came close to voting for an interest-rate increase this month, now has a chance to see that happen.
McCafferty was granted a second term of three years by Chancellor of the Exchequer George Osborne on Wednesday. Osborne, in his first BOE personnel decision since he himself won reappointment after the general election, also said that Treasury officials will soon start looking for a successor to McCafferty’s colleague David Miles, who will complete his second term at the end of August.
The decision will allow some of the current spectrum of opinion on the Bank of England’s Monetary Policy Committee to persist beyond September, when McCafferty’s first term expires. He and fellow member Martin Weale had previously favored a rate increase, and may have considered doing so this month, as BOE minutes released on Wednesday showed that two members found the merits of keeping borrowing costs unchanged were “finely balanced” against raising them.
“Ian has made a tremendous contribution to the work of the MPC during his current term, bringing a valuable perspective from his extensive work with business and industry,” Osborne said in a statement. “I am pleased that Ian will continue bringing his experience to bear.”
McCafferty, 58, is a former chief economic adviser at the Confederation of British Industry. For the final five months of last year, he and Weale voted for a quarter-point interest-rate increase. The other seven members kept the rate unchanged, and BOE forecasts released last week endorsed market bets that rate increases may not start until the middle of next year.
Miles, 55, is a former Morgan Stanley economist. In his six years on the MPC, he has tended to favor looser policy than colleagues. At eight decisions until Governor Mark Carney joined in July 2013, he was in a minority favoring more quantitative easing.
Osborne said that the process for appointing a successor to Miles will start next week.