The Business On... Martin Weale, Member of Bank of England's MPC
Thursday 27 January 2011
So, hawk or dove?
Surprisingly hawkish, as we see in the latest minutes of the Bank of England's Monetary Policy Committee (MPC). He has joined the perma-hawk Andrew Sentance in calling for a 0.25 percentage point rise in the bank rate immediately, which is rather against form. He is relatively new to the committee, appointed in July, but of strong and independent mind, as we see.
Why so unexpected, though?
Mr Weale used to run the respected National Institute for Economic and Social Research, the nation's oldest economic research body (founded in 1938) and, were such things to be viewed with any affection, its best loved. In his time there, he appeared to take the view that the economy had far too much spare capacity for inflation to pose much of a danger, and thus conformed to the Bank's conventional wisdom, as expounded by Mervyn King. Booming global commodity prices seem to have tipped the balance of his opinion, although one suspects that it was a marginal judgement.
Does he know what he's on about?
Yes, as much as any economist does. Mr Weale has an extremely distinguished track record as an academic, as a forecaster and researcher and as an adviser to Government, having served as one of Chancellor Ken Clarke's "wise men" back in the 1990s. Even by Bank standards, he has an unusually firm grip on economic history.
He's had a few, then again too few to mention. The biggest was calling the end of the recession too early.
What about Dr Banda?
In his youth Mr Weale did his bit for the developing world by serving as an economic adviser to the government of Malawi, then ruled by the unsavoury dictator Dr Hastings Kamuzu Banda, a man who used to feed his enemies to the crocodiles and pioneered the use of sheer boredom as a torture for political prisoners. Happily, Mr Weale survived his time in Africa. Threadneedle Street may be more treacherous.
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