Lyons Rises in Race for BOE Governor as Bailey Cements Lead
Gerard Lyons, a pro-Brexit economist who once advised Boris Johnson, is the biggest gainer in the race to lead the Bank of England, though financial supervisor Andrew Bailey remains the front runner.
Johnson’s election as prime minister has thrown the process of finding a new governor of the 325-year-old central bank wide open, catapulting Lyons to joint-second place, according to a Bloomberg survey. The 58-year-old has been tipped by bookmakers as a serious contender to succeed outgoing BOE chief Mark Carney since the Times reported he interviewed for the role.
The decision is now in the hands of new Chancellor of the Exchequer Sajid Javid, rather than his predecessor Philip Hammond, who posted the job advert.
Despite that shift, Financial Conduct Authority chief Bailey, who has led the Bloomberg poll of economists since it started in 2018, remains the favorite to succeed Carney when he leaves at the end of January, and has extended his lead since April. Meanwhile, former Reserve Bank of India governor Raghuram Rajan has slipped down the rankings after he indicated he didn’t apply for the job, partly as a result of the political challenges posed by Brexit.
Whoever is appointed will need a wide-ranging skill set, with the financial, academic and supervisory expertise to oversee the U.K. during a particularly challenging period. They will be expected to guide Britain out of crisis-era interest rates while maintaining financial stability and navigating the unprecedented political and economic complications of the nation’s departure from the European Union.
The Contenders
Andrew Bailey
CEO, Financial Conduct Authority
Bailey, 60, joined the banking regulator in 2016 after a distinguished career at the central bank, where he held roles including deputy governor, chief cashier and CEO of the Prudential Regulatory Authority. He studied at the University of Cambridge where he received a degree in history and a PhD in economic history.
Lauded by former Chancellor George Osborne at the time of his appointment as “simply the most respected, most experienced and most qualified person in the world” for the FCA role, he has more recently faced criticism for a soft touch on financial misconduct.
Ben Broadbent
Deputy Governor, BOE
Educated at Cambridge and Harvard, and with spells at the Treasury and Goldman Sachs under his belt, Broadbent, 54, has a classic CV for a central banker. As deputy governor for monetary policy—a role that also puts him on the Financial Policy Committee and Prudential Regulation Committee—he’ll have a handle on the task facing Carney’s successor.
Broadbent, who also studied music in Paris, is the longest-serving MPC member and has never dissented since joining the committee in 2011. His second term, which expires in May 2022, could be renewed. However, his image as a safe, establishment candidate may have been shaken last year by a clumsy description of the economy as “menopausal.” The comment sparked complaints about ageism and sexism.
Gerard Lyons
Economic Strategist, Netwealth Investments
Lyons was previously chief economic adviser to Johnson when he was mayor of London, and has views on Brexit, regulation and the BOE’s mandate that all differ from the bank’s current stance.
Now an economic strategist at Netwealth Investments, Lyons began his career in the City of London just as Margaret Thatcher was deregulating Britain’s finance industry, and worked as an economist at banks including Standard Chartered. He co-founded Economists for Brexit during the 2016 referendum campaign to make the economic case for leaving the EU. He later co-wrote a book called “Clean Brexit.”
Lyons has said he is “flattered” to be associated with the job, but is “very happy” doing his current portfolio of roles.
Andy Haldane
Chief economist, BOE
The BOE’s chief economist has a reputation for views that go against groupthink, despite spending more than a quarter century at Threadneedle Street. The 51-year-old son of a professional trumpeter is co-founder of a charity called Pro Bono Economics, and has spent time touring the country talking to “real” Brits at a series of town halls.
While known for colorful speeches—he’s made links between policy and biology and weather forecasting—his reputation for non-conformity may count against him. He’s previously landed himself in hot water with comments about the accuracy of economic forecasters and how property is a better bet for retirement than a pension.
Dave Ramsden
Deputy Governor, BOE
While he is one of the newer members of the MPC—only joining as deputy governor for markets and banking in 2017—Ramsden is a familiar face at the BOE after spending a decade as the government’s observer at monetary policy meetings. A career civil servant, he spent almost 30 years at the Treasury with the final 10 as chief economic adviser.
An insider to both the central bank and the government, and already part of the FPC, Ramsden, 55, may be seen as a safe pair of hands. But his work on the Treasury’s negative analysis of the impact of Brexit in 2016 may open him up to criticism from politicians who backed leaving the EU.
Raghuram Rajan
Ex-Governor, Reserve Bank of India
Rajan is still seen a contender by some economists even after he said he didn’t apply for the role. The 56-year-old oversaw the creation of India’s six-member Monetary Policy Committee, mandated to target inflation, and was instrumental in prodding banks to clean up their balance sheets. He has also served as the IMF’s chief economist.
Best Of The Rest
Jon Cunliffe
Deputy Governor, BOE
With stints at the Treasury and as the U.K.’s permanent representative to the EU, Cunliffe, 66, would be well-placed to help the BOE navigate the economic aftershocks of Brexit. As deputy governor for financial stability, he is a member of both the bank’s FPC and MPC.
Cunliffe took a less conventional route into the upper echelons of the BOE, first working as a civil servant after gaining a degree in English from the University of Manchester and then lecturing in Canada. He moved on to the Treasury and later acted as adviser to two prime ministers.
Minouche Shafik
Director, LSE
The Egyptian-born economist, 57, had already served as a BOE rate-setter for three years before taking her current role as director of the London School of Economics and Political Science. She studied in the U.S. as well as the U.K. and was the youngest-ever vice president at the World Bank. She has also worked in the British government and at the International Monetary Fund.
Glenn Stevens
Ex-Governor, Reserve Bank of Australia
If the Treasury looks abroad for qualified candidates, Stevens, 61, could be one of them. He’s an Australian economist who was the governor of the Reserve Bank of Australia for 10 years. He left in 2016.