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By Sumeet Desai
LONDON, March 19 (Reuters) - Morgan Stanley chief UK economist David Miles will replace David Blanchflower on the Bank of England's Monetary Policy Committee when the arch dove leaves in June, Britain's finance minister said on Thursday. And MPC member Tim Besley said he would not seek a second term on the committee when his first expires in August.
"I am delighted that David Miles has agreed to join the Monetary Policy Committee," finance minister Alistair Darling said.
"His considerable experience analysing the interaction between financial markets and the economy will be extremely valuable to the Committee."
Besley said in a statement that he had decided not to pursue a second three-year term so that he could concentrate on his academic career.
But it also may not have made political sense for the government to reappoint him given the hawk had voted for two interest rate rises last year when the economy was already in recession.
In a written reply to Besley, Darling said: "I would like to take this opportunity to thank you for your major contribution to the work of the committee since 2006."
"It is extremely important that that the committee contains a range of experts that energetically put forward challenging analysis and views to help shape the debate," he added.
QE SUPPORT
Miles, a visiting professor at Imperial College London, who joined Morgan Stanley in Sept 2004 has long been regarded as a possible candidate to join the MPC.
In 2003, the Treasury commissioned him to lead a review of the UK mortgage market which he reported back on in 2004, In it, he advocated the use of longer-term fixed rate mortgages.
In a Morgan Stanley research note at the start of March, Miles called into question whether the BoE's quantitative easing plan to boost the economy would work, but said it was the right policy to pursue because the "inflation risks of 'printing money' are not high".
In an opinion piece for the Financial Times in January, Miles said in order to prevent a repeat of the credit crisis more needed to be done to prevent big rises in asset prices -- particularly house prices -- and to stop too much risky lending.
"Some element of housing costs should be reintroduced into the measure of inflation targeted by the Bank of England's Monetary Policy Committee," he said.
He also banks should have higher capital requirements that work in a counter-cyclical way, an opinion held by many policymakers.
The Treasury said they would advertise to fill Besley's job in due course.
(Additional reporting by Matt Falloon)