Correspondence

Monetary policy remit, 2013

The Bank of England Act 1998 requires the Treasury to specify at least once every 12 months how price stability should be defined and what the…

• From: HM Treasury
• Published: 20 March 2013

Documents

Letter from the Chancellor of the Exchequer to the Governor of the Bank of England 20/03/2013

PDF, 99.9 KB, 5 pages

This file may not be suitable for users of assistive technology.

Request an accessible format.

If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email [email protected]. Please tell us what format you need. It will help us if you say what assistive technology you use.

Details

The Bank of England Act 1998 requires the Treasury to specify at least once every 12 months how price stability should be defined and what the economic policy of the Government consists of. This is the monetary policy remit, which the Chancellor specifies in a letter to the Governor of the Bank of England.

Monetary policy has a critical role to play in supporting the economy as the Government delivers on its commitment to necessary fiscal consolidation. To ensure that it can continue to play that role fully, the Government has reviewed the monetary policy framework in international and historical context. This Review of the monetary policy framework is published alongside Budget 2013.

Review of the monetary policy framework (PDF 590KB) As a result, the Government has updated the remit for the Monetary Policy Committee. The Government has:

retained a flexible inflation targeting framework and reaffirmed the 2 per cent inflation target, which applies at all times; updated the remit to clarify the trade-offs that are involved in setting monetary policy to meet a forward-looking inflation target; and requested that the Monetary Policy Committee (MPC) provides in its August 2013 Inflation Report an assessment of the merits of using intermediate thresholds – policy commitments conditional on future economic developments – in the operation and communication of monetary policy.

Published 20 March 2013