Goldman guru to join the MPC

GOLDMAN Sachs economist David Walton will replace Marian Bell on the Bank of England's monetary policy committee (MPC), Gordon Brown announced today.

Walton, currently chief European economist at Goldman, has previously worked at the Treasury and been a City economist for almost two decades.

He is chairman of the Society of Business Economists and has served as an adviser on monetary and fiscal policy issues to the Treasury Select Committee.

The announcement ends months of speculation over Bell's future as her three-year term officially ends on 31 May. But she will stay on until the end of June, with Walton taking over for the July MPC meeting.

Walton recently attacked Brown over his rosy view of the economy, saying growth this year was likely to be nearer 2.5% than the 3% to 3.5% the Chancellor is expecting. He also said that Brown will secure £4bn less in tax revenues this financial year than he is counting on.

His appointment will deprive the nine-strong MPC of one of its more dovish members. Bell, a former City economist, voted for five rate cuts, three of them against the MPC's consensus view. In a recent poll, Goldman called for one further rise in interest rates, taking borrowing costs to 5%.