The appointment will take effect in July, with Dr Forbes attending the MPC meeting on 7 July. The appointment will initially be for a 3 year term.
Dr Forbes will replace Ben Broadbent, who was appointed as Deputy Governor for Monetary Policy in March. Ben will continue to serve as a member of the MPC by virtue of his new position.
As an external member of the MPC, Dr Forbes will hold 1 of 9 votes to decide UK monetary policy. The MPC meets monthly to set monetary policy it judges will enable the inflation target to be met.
The Chancellor said:
Monetary policy plays a critical role in our long term economic plan, delivering economic security to hardworking people. Dr Kristin Forbes is an economist of outstanding ability with real practical experience of policy making. She will make an exceptionally strong addition to the MPC. It’s a sign of the high regard in which the Bank of England and our monetary framework are held around the world that someone of Kristin’s ability wishes to be part of them.
Kristin Forbes is currently Professor of Management and Global Economics at the Massachusetts Institute of Technology (MIT). Between 2003 and 2005, she was 1 of 3 members of the White House’s Council of Economic Advisers, with primary responsibility for international macroeconomic issues. Prior to that, Dr Forbes worked at the US Treasury, the World Bank and Morgan Stanley. She has a PhD in Economics from MIT.
The Monetary Policy Committee makes decisions about monetary policy. From August, it will comprise the Governor of the Bank of England, the 3 deputy Governors, and the Bank’s chief economist and, 4 external members with relevant expertise who are appointed by the Chancellor. The appointment of external members is designed to ensure that the MPC benefits from thinking and expertise in addition to that gained inside the Bank of England.
The vacancy for this position on the MPC was advertised in the media in April 2014. 34 applications for the position were received.
A panel comprising Dave Ramsden and Sharon White from the Treasury and Kate Barker, external member to the MPC 2001-10, interviewed a number of candidates and made recommendations to the Chancellor, which informed his decision.
Future vacancies on the Monetary Policy Committee will continue to be advertised.