The Treasury has appointed a financial markets expert to the Bank of England’s monetary policy committee, replacing the interest rate-setting panel’s most dovish member as it responds to the worst banking crisis since 2008.
Megan Greene, the global chief economist at Kroll, a US private investigations and financial advisory firm, will join the MPC as an external member on a three-year term starting on 5 July.
She replaces outgoing external economist Silvana Tenreyro, who has warned against raising interest rates further as households and businesses come under increasing pressure from higher borrowing costs. Economists consider her as a leading “dove” on the nine-strong panel, meaning she advocates for lower rates to support jobs and growth.
Greene, who has a breadth of experience working in financial services, joins the committee at a delicate moment after 11 successive rate increases in the MPC’s most aggressive response to inflation in its history.
Financial markets expect at least one more rate increase from the current level of 4.25%. However, Tenreyro has warned rate cuts could be required as the impact from previous hikes weighs on the economy.
The appointment of a financial markets expert comes as central banks around the world consider the impact from recent turmoil in the banking sector triggered by the collapse of the US technology lender Silicon Valley Bank and the Swiss government-brokered takeover of Credit Suisse by UBS.
Economists have warned the turbulence could further drive up borrowing costs for businesses and households, adding to impact from higher rates. Threadneedle Street is expected to publish an initial assessment at the MPC’s next meeting on 11 May.
The chancellor, Jeremy Hunt, said Greene’s experience across financial markets and the real economy would “bring valuable new expertise” to the MPC.
“I am delighted to appoint her to this role and look forward to seeing her contribution to policymaking in the coming years,” he said.
Andrew Bailey, the Bank’s governor, added: “She brings significant experience from her work across financial services and academia and we will benefit greatly from her contributions to our policy discussions.”
As a regular commentator in the media and a columnist for the Financial Times, Greene said last month that Britain was likely to enter a recession this year, suggesting that the outlook was “quite worrying”. She also said further interest rate hikes from the central bank were likely.
Alongside her work at Kroll, Greene is a senior fellow at the Watson Institute for International and Public Affairs at Brown University, and is a board member of the academic advisory committee at the San Francisco Fed – one of the 12 regional institutions that make up the US Federal Reserve.
Known as the world’s most famous corporate security and investigations business, Kroll was founded by the industry veteran Jules Kroll in 1972. It was bought by the US insolvency and restructuring consultancy Duff & Phelps in 2018, before the group renamed itself as Kroll in 2021.
Greene said: “It will be a privilege and a challenge to help address some of the key monetary policy challenges of our time.”
