Reflections on Monetary Policy after 25 Years of the MPC

This book marks 25 years since the Bank of England became operationally independent in 1997.

Central Bank independence has become a key part of how the world economy operates. We examine the independence of the Bank of England since 1997 and how independence has worked in practice to control inflation and stimulate economic growth.The Bank of England was given operational independence by the UK Parliament in 1997. The key feature of this independence is that the Bank's Monetary Policy Committee has sole responsibility for setting interest rates to achieve the Government's inflation target. Featuring contributions from leading academics and practitioners, Reflections on Monetary Policy after twenty-five years of the MPC assesses and reflects on this independence, particularly in relation to the activities of the Monetary Policy Committee. The book is organised around four main themes: the remit given to the Bank of England in 1997, the decision-making process by which the Bank determines monetary policy, the use of unconventional policy after the financial crisis of 2007–11, and the scale and scope of the communication that the Bank uses to inform the public. It argues that the economy works best when agents understand why the central bank behaves in a particular way.