UK chancellor of the exchequer Rishi Sunak. Picture: REUTERS/JOHN SIBLEY
UK chancellor of the exchequer Rishi Sunak. Picture: REUTERS/JOHN SIBLEY

London — Wanted: a monetary policy expert to strengthen the increasingly close relationship between the UK government and the Bank of England (BoE).

The UK treasury is hiring an official to oversee the co-ordination of monetary and fiscal policy and explore ways the central bank’s remit can support the government’s economic objectives.

The job opening for a head of monetary policy comes after a year in which policymakers at the treasury and BoE have worked closely to fight the economic effect of the pandemic, drawing praise from the International Monetary Fund as one of the “one of the best examples of co-ordinated action” in the world.

Still, that level of co-operation has already raised questions over the BoE’s operational independence from the government, which was granted in 1997, and those concerns may mount should the treasury make changes to the BoE’s remit that are seen as overly political.

The government sets the BoE’s main goal, which is hitting the 2% inflation target, and doesn’t interfere with the central bank’s actions to achieve it. That’s designed to prevent any government from being tempted to use interest rates to generate economic growth to help win elections.

However, rates are at record lows, near zero, and the BoE’s main tool is buying government bonds. That keeps the UK treasury’s borrowing costs low, even as it ramps up spending to fight the slump.

According to the job description, posted on the civil service website, the role will pay between £52,500 and £57,000, and include:

  • Advising the chancellor on the evolution of the UK’s monetary policy framework, and exploring policy options for the remit of the monetary policy committee (MPC) to support the delivery of the government’s economic objectives.

  • Advising the chancellor on UK monetary policy developments.

  • Ensuring the co-ordination of monetary and fiscal policy by supporting the chief economic adviser in their role as treasury representative to the MPC and the chancellor’s discussions with the governor of the BoE.

  • Leading the branch’s analysis on the economic and operational implications of monetary policy decisions, and potential future monetary policy tools.

  • Supporting the treasury’s chief economic adviser in appointing external members to the MPC.

Bloomberg

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