Bank of England chief economist Charles Bean has been named as one of the central bank's two deputy governors.
Mr Bean will take over from Rachel Lomax as the deputy governor for monetary policy. She decided not to serve another five-year term when her current one expires at the end of this month.
In his new position, 54-year-old Mr Bean will chair the interest rate-setting Monetary Policy Committee (MPC) if governor Mervyn King is not present.
The news follows the announcement on Wednesday that the Bank's deputy governor for financial stability Sir John Gieve was to stand down early.
Mr Bean, who has been with the Bank since October 2000, was formally appointed deputy Governor by the Treasury.
He is understood to have been the first choice of Mr King, and his appointment follows reports of tension between the Governor and the Government over who should take on the role, with the Treasury understood to have been keen to give the job to a financial stability expert following the problems at Northern Rock.
Cambridge University-educated Mr Bean will be replaced by senior Bank economist Spencer Dale, who is currently on secondment to the US Federal Reserve and will take Ms Lomax's position on the MPC.
Mr King said: "I am delighted that the Treasury has asked Charlie Bean to take on this vital role overseeing our monetary policy work.
"I am extremely pleased that the Bank has been able to promote Spencer Dale, his replacement, from the immensely talented pool of economists we have within the Bank."
Chancellor Alistair Darling said he was "delighted" about Mr Bean's new role, and that he was a "world class" economist.
