Treasury adviser Sir David Ramsden to join Bank rate-setters

The Treasury's top economic adviser is to leave the role to become a high profile member of the committee that sets interest rates at the Bank of England.

Sir Dave Ramsden will become deputy governor for markets and banking from 4 September, succeeding Charlotte Hogg who resigned from her roles at the Bank in the spring after a conflict of interest row .

The Bank confirmed to Sky News he would be the first person appointed directly by the Treasury and straight from the Treasury to sit on its monetary policy committee (MPC) since the Bank was granted independence on setting interest rates in 1997.

Sir Dave, who is a graduate of the London School of Economics and has been in his current civil service role since 2008, will take up his new role at a crunch time.

The Bank is currently fighting battles on several fronts to prevent risky lending to consumers.

There has also been a growing level of support on the MPC for a rise in the Bank rate to help combat soaring inflation, though whether that support remains now has been muddied by several factors in recent weeks.

There was surprise among economists and financial market participants in June when three members of the MPC voted for a rate rise.

The minutes of the meeting revealed that Ian McCafferty and Michael Saunders had joined Kristin Forbes in backing a hike - from the Bank's post-Brexit vote low of 0.25%.

She (Munich: SOQ.MU - news) has since left the MPC following the conclusion of her term - replaced by LSE professor Silvana Tenreyro who, incidentally, we now know will be the lone female voice on the MPC.

It is unclear whether she will share the view that higher inflation should be tackled but will take part in her first vote next week.

Since June, the Bank's chief economist has signalled he would support a rate rise later this year and even the governor, Mark Carney, has made remarks that were seen as 'hawkish' but he appears set to maintain his opposition for the time being.

Pressure for a rate rise has deteriorated in recent weeks with the latest official figures pointing to an easing in the rate of inflation and pay growth picking up slightly, relaxing the squeeze on household budgets.

Economic growth also remains anaemic - measured at 0.3% for the second quarter of the year - with the Chancellor Philip Hammond admitting a hit to UK plc from Brexit uncertainty.

The Bank will give its latest verdict on interest rates and the outlook for inflation on 3 August.

Financial markets expect no change in borrowing costs at that time but will be watching closely for signs of an interest rate rise moving closer.

Commenting on Sir Dave's looming appointment, Mr Carney said: "As an outstanding public servant, he will bring a wealth of experience and economic expertise to the Bank's policy committees."