Hunt is on for Bank deputy to replace Lomax

The Government has six weeks to find a new deputy governor of the Bank of England, after the Treasury confirmed yesterday that Rachel Lomax would not seek reappointment when her term ends next month.

The Independent on Sunday revealed yesterday that Ms Lomax, the first woman to serve as deputy governor, would not be staying on at the central bank when her five-year term expires on 30 June, despite the Prime Minister's attempts to convince her otherwise.

A source close to the Treasury said: "The search is under way. The appointment needs to be made before she goes at the end of June."

No shortlist has been drawn up, but a number of names have been mentioned in connection with the role to serve alongside Sir John Gieve, the other deputy governor. Internal candidates tipped include Paul Tucker, the central bank's director of markets. Guardian Media Group's chairman, Paul Myners, and Sir James Sassoon, the Treasury's ambassador to the City, have also been linked to the job.

The role of deputy governor of the Bank of England is a crown appointment, on advice from the Prime Minister. He is likely to seek guidance from the Bank of England governor, Mervyn King, and the Chancellor, Alistair Darling, on what is a vital appointment at a time of such uncertainty in the UK market.

Ms Lomax sits on the Monetary Policy Committee, which sets interest rates. This year she has twice voted for rate cuts and twice voted to hold. The committee will meet to hold a hearing before her successor is appointed.

Ms Lomax, a Cambridge graduate in economics, wants to explore other business ventures.

The Treasury is also preoccupied with trying to fill another high-profile appointment in the financial markets. The Government is looking for a new chairman of the Financial Services Authority, the watchdog for the British financial markets.

Relations between the Treasury, the Bank of England and the FSA have been strained over recent months over the near-collapse of Northern Rock and its subsequent nationalisation.

Representatives of the regulator and the central bank were hauled over the coals by a Treasury select committee over responsibility for the Northern Rock affair.