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The UK economy

Published online by Cambridge University Press:  26 March 2020

Richard Kneller  and
Garry Young
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Extract

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.

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Other
Information
National Institute Economic Review , Volume 169 , July 1999 , pp. 8 - 30
Copyright
Copyright © 1999 National Institute of Economic and Social Research

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Footnotes

∗

The forecast was compiled using the latest version of the National Institute Domestic Econometric Model. We are grateful to Ray Barrell, Nigel Pain, Rebecca Riley and Martin Weale for comment and discussion.