Paul Hunt, managing director of Phoebus Software said, “More members of the MPC are voting to increase interest rates and that shows they are not prepared to support a market that is currently being propped up solely by a surge in buy-to-let investment.
“They are failing the mortgage industry and the UK housing market. But when you look at the people involved, it’s clear why. These people know how to teach economic theory but they have no practical experience of the mortgage market.”
The MPC’s nine-man team (the committee and the Governor of the Bank, Mervyn King) only has a combined total of 112 years experience between them, at the Bank or in mortgage lending according to Phoebus.
Paul Hunt said, “Between them, our nine most senior employees have over 290 years experience in lending, mortgage consultancy, or in software development for lenders. On average, that’s 32 years each – more than double what the MPC can muster.
“We regard experience as an extremely valuable commodity – the worrying thing is that the MPC doesn’t seem to be operating along the same principles.”
Phoebus argues that inexperience has cost the lending industry dear in the past.
Paul Hunt said, “I’m sure Andrew Sentence - who is thankfully being replaced on the committee - made a very good head of environmental affairs at British Airways. Martin Weale’s experience may make him an expert on Malawi’s office of national statistics. But they don’t know what it’s like at the UK property market’s coal-face.
“That’s a recipe for disaster.
“Andy Hornby had no previous banking experience when he was given control of HBoS. He was a very successful retailer, but what he knew about the finer points of banking, you could write on the back of a postage stamp. Did Christopher Rodrigues’ previous job as CEO of Thomas Cook help him steer Bradford & Bingley on a sensible course when he took control in 1996? Of course not. Matt Ridley was chairman of Northern Rock when it had to be nationalised. Apparently, editing magazines didn’t help him recognise the risks of the bank's financial strategy when he oversaw the board.
“The MPC should have learned from those painful lessons.”
