Bank of England chief economist Andy Haldane to leave central bank

Andy Haldane, the chief economist of the Bank of England, is leaving the central bank to become the chief executive of the Royal Society for Arts, Manufactures and Commerce (RSA).

Haldane will step down in June after over 30 years at the Old Lady and will take up the new top job at the RSA in September, the Bank said, adding it will start looking for a replacement ‘in due course’.

His exit comes as a surprise as he had been reappointed for a new three-year term as a member of the Monetary Policy Committee back in June 2020. 

Surprise exit: Andy Haldane will leave the Bank of England in June

Haldane has been more upbeat about the UK economic recovery than other MPC members, arguing that it will bounce back like a coiled spring once liberated from lockdown. 

He has also warned about the risk of rising inflation, linking it to a tiger that could easily be roused.

James Smith, an economist at ING bank, said his departure means the Bank is losing it’s major ‘hawk’, or someone who favours higher interest rates to keep inflation in check.

‘In theory, at the margin this tilts the committee towards a more favourable view on negative interest rates if more stimulus were needed, though we still think this is unlikely,’ Smith said.

And added: ‘Not only does the economic outlook look promising, but not all remaining MPC members appear convinced about the policy’s merits.   

‘Our view on the Bank of England is unchanged, and we think the most likely next move in interest rates is up rather than down, albeit this is unlikely to happen before 2023 at the earliest.’

Bank of England governor Andrew Bailey said Haldane had been an ‘exemplary public servant’ over his more than three decades at the Bank

Haldane will replace the RSA’s departing chief executive Matthew Taylor (pictured), who announced he was stepping down in December last year

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Stuart Cole of Equity Capital believes Haldane’s departure ‘will certainly see a move dovish tone seep into meetings’ and argues that his replacement will be someone more ‘dovish’ – or more prone to keep interest rates low.

He said: ‘You have to wonder how much influence there will be from HMT (HM Treasury) to try and ensure his replacement is of a more dovish ilk.

‘The last thing HMT wants is borrowing costs to rise, given its huge pile of debt which could quickly become unaffordable if servicing costs rise too sharply.’

Bank of England governor Andrew Bailey said Haldane had been an ‘exemplary public servant’ over his more than three decades at the Bank, ‘making major contributions to the Bank’s work in financial stability and monetary policymaking’.

Haldane joined the Bank in 1989 and served as a member on both the Bank’s Financial Policy Committee (FPC) and MPC. He took up the role of chief economist in 2014.

He has also led the Government’s Industrial Strategy Council, as well as co-founding Pro Bono Economics in 2009, a charity chaired by former Cabinet Secretary Lord Gus O’Donnell and dedicated to using economics to empower the social sector.

In 2014, he was named by Time magazine as one of the world’s 100 most influential people.

In a statement announcing his departure, Haldane said: ‘The Bank is a fantastic institution and I loved my 32 years in public service there. 

‘I will miss hugely my brilliant colleagues and friends but know that, under Andrew’s exceptional leadership, they will continue to serve the people of the UK with distinction.

‘I am thrilled to have the opportunity to lead another great British institution, the RSA. For 250 years, it too has served society with distinction, combining the very best of public service, commercial innovation and civic participation. 

‘I am delighted to be helping write the next chapter in the RSA’s illustrious history.’

He will replace the RSA’s departing chief executive Matthew Taylor, who announced he was stepping down in December last year.

The RSA is an independent charity founded in 1754, which ‘unites people and ideas to develop practical solutions to solve the challenges of our time’. Its president is HRH Anne, the Princess Royal.   

Haldane’s role will include taking forward the organisation’s programmes on the ‘Future of Work’ – looking at how to make ‘all work good work in an era of technological change’ – as well as ‘Regenerative Futures’, which looks at embedding sustainable practice within industries.   

Tim Eyles, RSA chair, said: ‘This is a moment of huge historic significance for the world. The challenges presented by Covid, deep-seated inequalities, and Brexit in the UK, require powerful and creative thinking, and the delivery of practical solutions capable of global application. Change must come if lives are to be improved and the planet’s future secured.

‘Andy’s extraordinary accomplishments — in his thirty years at the Bank of England, in economic policymaking and academia, in his commitment to people leadership and diversity, equity and inclusion, and in building bridges between experts and citizens, government, business and the third sector — all make him ideally placed to lead the RSA at this critical juncture.

‘We are incredibly excited at the prospect of Andy being at the helm to take the RSA’s ambitions forward and generate even greater societal impact, building on the strong legacy created by Matthew Taylor’s leadership over the last 15 years.’