The Inside Men Who Johnson May Tap for a More Understated BOE

(Bloomberg) --

After more than five years of a high-profile Bank of England chief, the new government may welcome the quieter tone of one of his capable deputies.

Mark Carney, due to leave the BOE in January, has drawn the ire of the Brexiteers that form much of Boris Johnson’s administration for what they see as overly political and gloomy statements on the U.K.’s future outside the European Union.

With one of the first tasks in the new government’s in-tray being picking a new governor, one appealing option could be choosing a seasoned operator from within the institution. That opens the door for all three of the deputy governors on the Monetary Policy Committee -- Ben Broadbent, Jon Cunliffe and Dave Ramsden.

Such a move could burnish Johnson’s economic credentials by avoiding a more controversial choice and draw a contrast with Carney, who joined the BOE with a strong international reputation after leading the Bank of Canada.

“They are all probably less dynamic, less outspoken than Carney,” said Samuel Tombs, an economist at Pantheon Macroeconomics in London. “All three of them would be considered to be a safe pair of hands, and not get too much in the government’s way.”

More Academic

While none of the three differ wildly from the incumbent in their views on Brexit or monetary policy, they tend to be less forthright in the expression of those opinions, and their language, particularly with Broadbent, tends to veer toward the more academic end of the spectrum.

That puts them in the same mold as Financial Conduct Authority chief Andrew Bailey, who leads the race to replace Carney in Bloomberg’s latest poll of economists. Still, Bailey’s candidacy may be undermined by recent criticism over his record on tackling financial misconduct.

Broadbent was joint second in the latest poll, while Ramsden and Cunliffe stood fifth and seventh. None of them have explicitly said whether they have applied for the role.

The three insiders have followed career paths, including stints at the Treasury, that are likely to make them popular with an interview panel which reportedly prizes Whitehall experience. John Kingman, the chairman of Legal and General Plc, and Cunliffe are favored by the Treasury, according to the Daily Mail.

“Carney came from a very different background,” said Sanjay Raja, a U.K. economist at Deutsche Bank AG in London, who says Bailey remains the frontrunner. “If you have Ramsden, Cunliffe or Broadbent, they are understated to some extent, relative to Carney.”

Still, there’s a chance their pedigree could count against them. The Treasury, as well as the BOE, has been seen as anti-Brexit by some in the new government, and the appointment of another insider may not be a radical enough departure.

That may be particularly true for the 54-year-old Broadbent, whose resume -- including spells at Harvard and Goldman Sachs -- echoes Carney’s own career. The deputy governor for monetary policy, a trained pianist, also dented his reputation as a safe pair of hands last year when he caused a storm of complaints over a clumsy use of the word “menopausal” to describe the economy.

Brexit Work

Ramsden, the deputy governor for markets and banking, may also be unpopular with the new government thanks to his work on the Treasury’s negative analysis of the impact of Brexit in 2016 -- the bête noire of the anti-EU lawmakers in Johnson’s cabinet. The 55-year-old spent more than two decades at the Treasury, including a long spell as the government’s observer at BOE monetary policy meetings.

Cunliffe, meanwhile, is the eldest and most unconventional central banker of the three. A graduate in English literature from the University of Manchester, Cunliffe has acted as adviser to two prime ministers and also served as the U.K.’s permanent representative to the EU. Now deputy governor for financial stability, he is perhaps the quietest member of the MPC.

“What you get from Broadbent, a Cunliffe or a Ramsden is continuity in policy” said Deutsche Bank’s Raja. “That’s the key thing.”

--With assistance from Eddie Spence and Harumi Ichikura.

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Andrew Atkinson

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