As chief economist at the Paris-based Organization for Economic Co-operation and Development (OECD), Clare Lombardelli is one of the few Britons to hold one of the senior positions at a global policy institution.
So it is somewhat curious that, after just a year of handing out advice to the 38 members of the OECD, widely regarded as the elite of Western capitalism, she has agreed to return to Britain as deputy governor of the Bank of England.
There will be a lot of discussion about how the 11-member Monetary Policy Committee (MPC) now has a majority of female members for the first time and how good that is for diversity.
It could also be the case that the Treasury Department is trying to implement succession planning for when Andrew Bailey ends his term as governor in March 2028.
The challenges will be significant. Lombardelli will be responsible for implementing the recommendations of former US Federal Reserve Chairman Ben Bernanke, who was called in by the Court, the Bank’s supervisory board, to highlight a poor prognosis.
Diversity: The Bank of England’s 11-member Monetary Policy Committee now has a majority of women
If the authorities were looking for a diversity of views and an end to perceived ‘groupthink’ about the MPC, they could have been more imaginative.
Lombardelli completed her internship at Threadneedle Street before taking on several key roles in Whitehall, including private secretary to George Osborne when he was Chancellor.
She would not meet former Governor Mervyn King’s rigorous definition of what a senior banking economist should be because there is no PhD on her CV.
A lack of exposure to the commercial world can also be considered a gap.
Another MPC member, Catherine Mann, told an FT conference this week that the spending habits of wealthy Britons had made curbing inflation more difficult as they continued to spend on travel, eating out and the like regardless of the monetary tightness.
A trip to Gatwick or Stansted airports and the record bookings of Ryanair and Easyjet, where most travelers are ordinary, middle-income citizens, can remind Mann that it’s not just the rich who like to have a good time.
Squeezing the consumption kernel at a time when Britain’s resilience is being tested does not seem like the smartest idea as headline inflation heads towards the 2 percent target.
Flying colors
Perhaps we should take a look at the 2023 annual figures of British Airways owner IAG.
It reported an operating profit of £3 billion, more than double the previous year and above pre-Covid levels, driven by strong demand for leisure travel.
How dare travelers in Britain and across Europe waste their resources on enjoying themselves!
BA remains the jewel in IAG’s crown, with its dominance in transatlantic travel.
The surprise is that so many are staying with BA and Heathrow, where only 60 percent of flights departed or arrived on schedule last year.
As a passenger who suffered two BA delays of several hours last spring, I know what that feels like.
One goal for 2024, with good bookings already for the first two quarters of the year, is to rebuild long-haul capacity for BA and Iberia.
Business traffic has yet to fully get going, which offers opportunities for expansion. BA would like to consider that the rising costs of the Club class could be an obstacle.
BA has long been opposed to a third runway at Heathrow, fearing it would create more gates and capacity for rivals.
A recent report from Heathrow states that a third runway, seen by the government as the best option for growth, is off the table.
If Britain is to make the most of its opportunities as a global center for financial, business, creative and technical services, it must recognize that capacity constraints will hold it back.
Taking stock
Recent listed fugitives have unnerved the London Stock Exchange.
It’s easy to forget that it has become a financial data powerhouse under CEO David Schwimmer.
A partnership with Microsoft should bring the magic of AI to the data and analytics, although you have to be careful what you wish for with greedy tech masters of the universe.
A £1 billion share buyback should ease investor anxiety.