Replacement on MPC could swing the debate over rate rises

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The Independent Online

Richard Lambert has the rare honour of voting with the majority on the Bank of England's Monetary Policy Committee for his entire three-year stint.

He voted five times for higher borrowing costs and twice for them to be reduced in his 27 meetings, siding with the majority every time, the Bank's record showed.

"Lambert was perhaps a bit more reticent and didn't stick his head above the parapet that often," Neville Hill, at Credit Suisse, said. Analysts said his replacement could swing the debate over the path for future interest rates in either direction.

Alan Clarke, at BNP Paribas, said the MPC had lost its most hawkish member, Sir Andrew Large, in February, and would lose its most dovish one, Stephen Nickell, in May. "That left the MPC with the same balance so we have to see what happens with Richard Lambert's replacement."

The new recruit to the nine-strong committee is not expected to be appointed by its next meeting on 5 and 6 April, Treasury sources said. This opens up the possibility of a 4-4 split on 6 April, which would leave Mervyn King, the Bank's Governor, with the casting vote. However, with the MPC voting 8-1 for the past four months, such a shift is unlikely.

A Treasury spokesman said a search for a new member was "under way" and insisted it would select the right candidate rather than "rush to fill Mr Lambert's shoes". It will also mean the MPC is likely to boast two new members in May, when Professor David Blanchflower, from the US, replaces Mr Nickell.

Mr Lambert suffered a bumpy start to his three-year stint on the committee, when he was cross-examined by MPs on the Treasury Select Committee over his lack of economic qualifications. Mr Lambert told MPs he was not a "professional economist", saying: "I bring to it a different sort of background from that of other members and a broad view of the world."

However, Mr Lambert was repeatedly defended by Mr King, who said he added a wider business perspective to their discussions.

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