Bank looks abroad in search for new monetary talent

THE Bank of England has been forced to cast its net wider and look abroad in its search for economists and financial specialists to help it in its mission to keep inflation on target and guarantee the UK's financial stability. The necessary talents to satisfy the new demand for economic expertise created by Gordon Brown's decision last May to grant the Bank its operational independence are in short supply in this country.

In a prominent full-page advertisement in the latest issue of The Economist magazine the Bank calls for applications from experts in a wide range of areas, from monetary theory to country risk analysis. It offers successful candidates "an unrivalled opportunity to influence the monetary policy debate".

The search for new talent reflects the change in the Bank's activities. Although it lost its banking supervision arm, it gained sole responsibility for hitting the inflation target set by the Chancellor, putting a new premium on the quality of its inflation forecasting.

The trouble is that the UK suffers from a shortage of highly trained economists. Unlike their US, Italian and Spanish counterparts, British universities produce relatively few graduates with higher degrees. Those who do gain Master's degrees or doctorates are more often tempted by the larger salaries they can command in investment banking.

Mr Brown himself opted to appoint two foreign-born economists to the Bank of England's Monetary Policy Committee - Willem Buiter and DeAnne Julius - although both are long-standing UK residents.

The Government Economic Service, which provides economists to Whitehall departments including the Treasury, has had difficulty in recruiting enough suitably qualified candidates.

Its new recruits are usually taken fresh from their first degrees and given further training, but many later succumb to the lure of City banks eager to hire people with some policy experience.

The Bank, which operates a separate recruitment scheme, is looking for economists with at least a Master's degree, or analysts from the financial markets for its financial stability wing.