Bank seeks new deputy as Lomax quits

SHE is the woman who has held the accolade of "even making Mervyn King appear dovish".

Now Rachel Lomax, deputy governor of the Bank of England is to step down from her post, despite attempts by Prime Minister Gordon Brown to get her to stay on for another term as the Bank struggles to cope with fallout from the global credit crunch.

Lomax, who has held the role for five years, is to leave at the end of next month. She was once tipped as a possible successor to Governor Mervyn King, before he was appointed to stay on for a second term.

But the 62-year-old is reported to have said she has had enough "of watching monthly base rates" and was looking to pursue other business ventures.

Lomax made her mark on the MPC during her first meeting in July 2003, when she stood alone in opposing a rate cut – even flying in the face of the hawkish King.

In recent months, she has twice voted against a cut and twice to hold, giving her the moniker of "dovish hawk".

In a speech in February, Lomax said the extent of the impact of the turmoil in financial markets on the UK was "highly uncertain" and warned the "largest ever peace-time liquidity crisis" was taking its toll.

A spokesman for the Treasury confirmed that the search for a replacement had begun, but a shortlist has yet to be drawn up.

Lomax is a key figure for the Bank, as she sits on the MPC which makes interest rates decisions and has responsibility for monetary policy.

The deputy governor role is a Crown appointment, made on the advice of the Prime Minister. The Bank's Governor Mervyn King and Chancellor Alistair Darling will be consulted on the choice of her successor.

Speculation has been mounting over who might replace Lomax. Paul Tucker, the Bank's director of markets, has been tipped as a possible candidate, following in the footsteps of the present incumbent, King and his predecessor Sir Eddie George, who also came up through the ranks, while former CBI chief Lord Turner is also being considered.

Other possible candidates include Paul Myrners, chairman of Guardian Media Group, and Sir James Sassoon, the Treasury's ambassador to the City.

It is understood that the appointment of a new deputy governor will be made fairly quickly due to the importance of Lomax's position.

However, the Treasury also has to appoint a new chairman by the end of the month for the City regulator, the Financial Services Authority.

BACKGROUND

CAMBRIDGE graduate Rachel Lomax has been described as "ferocious" and bold. Upon joining the Bank of England monetary policy committee in 2003, she took an immediate stand against lowering rates, the only member to vote against a quarter-point cut. Over the next 13 months the MPC voted for five rate rises, all supported by Lomax.

A former pupil of Cheltenham Ladies' College, she completed masters degrees from Cambridge and the London School of Economics in the 1960s. She then set about making her name in the Treasury during the 1980s as principal private secretary to Nigel Lawson. The economist also was a big hit in other governmental departments, such as the Department of Social Services (now the Department for Work and Pensions).

However, she hit a stumbling block as chief of staff in the 1990s at the World Bank, where she reportedly fell out with president James Wolfensohn.

In 2007 she received an honorary degree from the University of Glasgow.