Who is Sarah Breeden, the new deputy governor of the Bank of England shortly before the interest rate hike?

Interest rates are set to increase tomorrow (August 3 2023), with a rise of 0.25% that could bring UK interest rates to 5.25%. Should the trend continue, that figure might rise to 5.50% by the end of September 2023, according to XTB.

The Bank of England themselves have explained why the reasons for the increase in interest rates have occurred, blaming the rate of inflation (currently just below 9%), with the bank looking to decrease that percentage to their target of 2%.

“If you have a mortgage or loan, that means your payments may go up. If you have savings, that means you may get a higher return,” the Bank of England has warned on their website, “many people with mortgages or loans will be rightly worried about what these changes mean for them.” 

“But if we don't raise rates now, high inflation could stay with us for longer. And inflation hits everyone, particularly those who can least afford it. Raising interest rates is the best way we have of getting inflation back down to the 2% target. We expect inflation to fall significantly this year.”

It’s a particularly perilous chalice that the new deputy governor for the Bank of England has to take hold of, with the announcement that Sarah Breeden will assume the role from November 1 2023 - becoming the first female deputy governor since Charlotte Hogg in 2017 and two months after the predicted second interest rate rise in September.

Hogg only lasted eight weeks after lawmakers criticised her failure to declare a possible conflict of interest. Hogg's predecessor, Minouche Shafik, left halfway through her five-year term to head the London School of Economics.

Who is Sarah Breeden, the new deputy governor for the Bank of England?

Sarah Breeden is currently the Executive Director for Financial Stability Strategy and Risk at the Bank of England. In this role, she is a member of the Financial Policy Committee (FPC), which is responsible for safeguarding the UK's financial system from risks that could harm the broader economy and is tasked with overseeing the Bank of England's efforts to achieve this objective.

Breedan has been a key figure in the Bank of England's work on climate change both domestically and internationally since 2016; she has been part of the Steering Group for the Network for Greening the Financial System (NGFS) since its inception in 2017 and chaired its macro-financial workstream from 2018 until early 2022. The NGFS is a group of international central banks and supervisors dedicated to promoting environmental and climate risk management within the financial sector.

Before her current role, Sarah held several other significant positions within the Bank of England. She served as the Executive Director for UK Deposit Takers Supervision, where she oversaw the supervision of banks, building societies, and credit unions in the UK. She was also the Executive Director for International Banks Supervision, responsible for supervising the UK operations of international banks.

Earlier in her career, Sarah worked in the Bank's Financial Stability Strategy and Risk Directorate, focusing on developing the UK's macroprudential policy-making framework and supporting the Financial Policy Committee. She also led the Bank's efforts in transitioning prudential regulation of banks and insurers from the Financial Services Authority to the Bank. 

She however first got her start at the Bank of England as the assistant private secretary to then governor Robin Leigh-Pemberton, Baron Kingsdown, after graduating from the University of Cambridge in 1991.