New interest rate-setter unlikely to vote for higher rates

The newly appointed member of the Bank of England’s rate-setting committee is unlikely to vote for interest rate increases in his first months in office, say fellow economists

The Treasury announced this morning that Martin Weale, director of the National Institute of Economic and Social Research since 1995, will fill the vacant seat on the Monetary Policy Committee.

Weale - who replaces Kate Barker who left before the June meeting - will be able to participate in the August MPC meeting and the forecast round leading up to it.

Simon Ward, chief economist at Henderson, said Weale is an orthodox economist and his views are generally not out of line with consensus forecasts.

Weale is part of the Times’ shadow MPC committee and voted against a rate hike last month.

He told the paper that although inflation was a concern, it was broadly balanced by the downside risks to growth from the Greek crisis and the tumble in the value of the euro.

‘I don’t think he’ll rock the boat,’ Ward said.

Howard Archer, UK economist at IHS Global Insight, agrees.

‘It doesn’t seem from his very recent comments that he’s strongly pushing for a rate hike at the moment,’ Archer said, saying he expects Weale to be in the wait-and-see camp.

Archer thinks economic data over the next couple of months will mean the economy won’t look as healthy in a couple of months as it does  making it more likely the committee will hold off from voting for interest rate increases.

The MPC is expected to leave the Bank of England's Bank rates at the record low of 0.5% at Thursday’s meeting.

Last month, members voted seven to one against a rate hike. Only Andrew Sentance voted for an increase.