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Monetary Policy - Monetary Policy CommitteeExplanationIn 1997 the Bank was given operational independence by the Chancellor (Gordon Brown) and charged with the responsibility of setting the level of interest rates in the UK. To do this the Monetary Policy Committee was formed. The MPC has nine members - five from within the Bank of England, and four independent members. The committee is chaired by the Governor of the Bank of England, and the other Bank members are the two Deputy Governors, the Executive Director with responsibility for Financial Stability and the Executive Director with responsibility for Monetary Analysis. The Chancellor appoints the four independent members. Some of them are full-time and some part-time. The MPC will be carefully examining the state of the economy at all times and trying to analyse the exact effect that changes in interest rates might have. To do this they will consider a number of areas of economic theory, and they will also look very carefully at forecasts of inflation. |
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