Bank's Lomax to not serve second term

LONDON (Reuters) - Bank of England Deputy Governor Rachel Lomax will quit her post at the central bank when her term ends this summer, the Treasury said on Sunday, opening up a vacancy at a crucial time for the Monetary Policy Committee.

Lomax's 5-year term ends on June 30, 2008. The Treasury said a replacement would be announced in due course.

The new appointment will come at a critical time for the central bank and the economy. Inflation is soaring and growth is slowing sharply and the nine-member MPC has been split over the best way to handle what Governor Mervyn King has called the most challenging conditions in at least a decade.

Prime Minister Gordon Brown, meanwhile, has said he hopes interest rates can come down but that the decision is one for the central bank.

The Treasury said that while a search for Lomax's successor had begun, there was no short-list yet.

Lomax, a former top civil servant, was the first woman to hold the deputy governor's role at the Bank ever. Kate Barker is the only other female on the rate-setting committee.

King recently said he would like to see more people promoted from within the Bank. One contender could be Paul Tucker, currently executive director for markets, who has long been tipped as a future governor.

The appointment is in the government's hands but King will be consulted.