The UK economy

1999 ◽  
Vol 169 ◽  
pp. 8-30
Author(s):  
Richard Kneller ◽  
Garry Young
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Open Letter ◽  
Monetary Policy Committee ◽  
Bank Of England ◽  
The Uk ◽  
New Framework ◽  
Policy Committee

It is now just over two years since the new framework for monetary policy was announced and operational responsibility for the setting of interest rates was devolved to the independent Monetary Policy Committee (MPC) at the Bank of England. A key component of the new arrangements is their accountability. One of the ways in which this is meant to be achieved is by the ‘open letter’ system, whereby the Governor is to write to the Chancellor whenever inflation is one percentage point higher or lower than the target. It is remarkable that no open letters have yet had to be written.

The Bank of England's Monetary Policy Committee: A View from a Parlimentary Specialist Advisor

2006 ◽  
Vol 196 ◽  
pp. 77-91
Author(s):  
Mike Wickens
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Select Committee ◽  
Policy Regime ◽  
Monetary Policy Committee ◽  
House Of Lords ◽  
Bank Of England ◽  
The Uk ◽  
Policy Committee ◽  
The Way

This article assesses the new monetary policy regime introduced in the UK in 1997. It discusses the original remit given to the Bank of England, how it has been interpreted by the Bank and the conduct of monetary policy by the Monetary Policy Committee (MPC) subsequently. The article draws heavily on my experience as Specialist Adviser to the House of Lords Select Committee on Economic Affairs over this whole period. I conclude that the MPC has been very successful in fulfilling its remit, but that a puzzle remains at the heart of the policy over whether the way inflation targeting has worked in practice is consistent with how it is said to work in theory.

The Inflation Forecast

2001 ◽  
Vol 175 ◽  
pp. 59-66 ◽  
Author(s):  
C. A. E. Goodhart
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Time Lags ◽  
Variable Time ◽  
Monetary Policy Committee ◽  
Alternative Procedures ◽  
The Interest Rate ◽  
The Uk ◽  
Policy Committee

Given the long and variable time lags between interest rate changes and responses in output and inflation, an inflation forecast must lie at the heart of monetary policy. In the UK the Bank's inflation forecast and Report were developed when the interest rate decision still lay with the Chancellor. Its, largely unchanged, continuation has led to certain tensions once that decision was delegated to a Monetary Policy Committee of independently responsible experts. In this paper the question is raised whether such a Committee should be jointly and individually responsible for the inflation forecast, and what might be considered as alternative procedures.

The UK Economy: Forecast Summary

2016 ◽  
Vol 238 ◽  
pp. F3-F3
Keyword(s):  
Monetary Policy ◽  
Disposable Income ◽  
List Type ◽  
Price Inflation ◽  
Bank Rate ◽  
Monetary Policy Committee ◽  
Near Term ◽  
Article 50 ◽  
The Uk ◽  
Policy Committee

The economy will grow 2 per cent in 2016 before slowing to 1.4 per cent in 2017: with the triggering of Article 50 there are downside risks to next year's outlook.Consumer price inflation will accelerate, peaking at around 4 per cent in the second half of 2017, and this will impact on real disposable incomeThe Monetary Policy Committee is expected to look through this near-term inflation and hold Bank Rate at ¼ per cent until 2019.Sterling is expected to remain at around $1.22 and €1.11 this year and next.

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