Bell to replace Wadhwani on MPC

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The Independent Online

Sushil Wadhwani, the Monetary Policy Committee member who consistently voted to cut interest rates, will stand down next month, the Treasury announced yesterday. He will be replaced by Marian Bell, a former senior economist at Royal Bank of Scotland, who currently works as a consultant.

But Ms Bell will not join until July, meaning only eight out of nine MPC members will set rates in June.

City economists said the change would shift the committee more towards hiking rates. "It is difficult to imagine someone more doveish than Sushil," one said.

According to research by Deutsche Bank Mr Wadhwani voted to cut rates in 15 out of the last 18 meetings. However, little was known about the current views held by Ms Bell, who quit as head of research for RBS in 2000.

Neil Parker, an economist who worked with her at RBS, said: "I'd characterise her as a marginal hawk, but she's very pragmatic. She is a strong believer in the effectiveness of monetary policy with some monetarist leanings." While at RBS she criticised the Bank for being slow to cut rates during the slowdown in 1999.

Another economist said Ms Bell was a great believer in the concept of a neutral rate of interest to guide monetary policy, adding: "If I had to characterise her I would say she is a dove but not one who reacts in a mindless way." The decision ends weeks of speculation over whether Mr Wadhwani's three-year term would be renewed. According to a Treasury statement, Mr Wadhwani did not seek reappointment, confirming rumours he wanted to return to the private sector. A Bank spokeswoman said Mr Wadhwani was going to "spend three months purdah" thinking about his next career move.

During his time on the MPC he established a reputation as a leading intellectual who was happy to argue with those who disagreed with him.

Mr Wadhwani published several research documents outlining his views that the benefits of the "new economy" would allow the UK to grow faster with lower interest rates.

George Buckley, UK economist at Deutsche Bank, said: "Ms Bell has a hard act to follow with the departure of Dr Wadhwani, who held strong views and contributed in no small way to the economic research output of the Committee."

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