Hogg Named BOE Deputy Governor Hawk Forbes Plans to Depart

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  • COO replaces Minouche Shafik to head up markets and banking
  • Forbes won’t seek second MPC term and will leave in June

Charlotte Hogg

Photographer: David Levenson/Bloomberg

Charlotte Hogg will be the Bank of England’s new deputy governor for markets and banking, taking a high-profile role and joining the interest-rate setting committee at a critical time for policy.

Hogg, who replaces Minouche Shafik, joined the BOE from Santander in 2013, when she took the newly created role of chief operating officer and managed day-to-day running of the bank. Her flagship project has been to spearhead Governor Mark Carney’s radical overhaul -- announced in 2014 -- that fused departments and integrated policy functions.

The news of her appointment coincided with an announcement that Kristin Forbes, an external member of the BOE’s Monetary Policy Committee, will leave at the end of her three-year term on June 30 and not seek re-appointment. With Forbes currently the most vocally hawkish of the MPC members, that could shift the policy center on the committee.

The American policy maker was uncomfortable with some of stimulus the BOE implemented after the Brexit vote, and just this week said the strength of the economy and risks to inflation meant a rate increase could be justified soon. She is leaving to return to MIT’s Sloan School of Management.

“In losing Kristin Forbes, the MPC will lose a hawk,” said Chris Hare, an economist at Investec Securities in London and a former Bank of England official. “If you get more of a neutral dovish member as a replacement, that could shift the balance of the MPC a little bit.”

Brexit Test

The changes come as the bank awaits potential volatility related to Brexit. While the economy has remained strong, the pound’s drop has fueled inflation and Carney has said the consequences of the vote have barely begun.

Shafik’s departure to become director of the London School of Economics, had raised the prospect of the BOE losing one of only two women on the nine-member MPC, though Hogg’s appointment may head off additional criticism about gender imbalance. Carney, who previously bemoaned the lack of women policy makers, said on Thursday that the bank “must reflect the diversity of the people it serves.”

“By reflecting diversity and choosing inclusion, we will ensure we are doing all that we can to promote the good of the people,” he said in the text of a speech delivered at a private event at the bank.

Hogg, 46, joined the BOE in 1992 before becoming a McKinsey & Co. consultant in Washington. Prior to returning to the bank, she led Santander’s U.K. retail distribution operations.

In her new role, the Oxford and Harvard graduate will be responsible for the BOE’s international strategy, as well as managing its balance sheet and looking after market operations, the government’s foreign-exchange reserves and the U.K.’s large-value payment system. She will start her five-year term on March 1, and will also continue in her role as COO.

Hogg’s family background is steeped in politics. Her father served in the governments of Margaret Thatcher and John Major, her mother was an adviser to Major, and her grandfather and great-grandfather were both lord chancellors.