Monetary Policy Committee (United Kingdom)
The Monetary Policy Committee (MPC) is a committee of the Bank of England, which meets for three and a half days, eight times a year, to decide the official interest rate in the United Kingdom (the Bank of England Base Rate). It is also responsible for directing other aspects of the government's monetary policy framework, such as quantitative easing and forward guidance. The Committee comprises nine members, including the Governor of the Bank of England, and is responsible primarily for keeping the Consumer Price Index (CPI) measure of inflation close to a target set by the government, currently 2% per year (as of 2019). Its secondary aim – to support growth and employment – was reinforced in March 2013. Announced on 6 May 1997, only five days after that year's General Election, and officially given operational responsibility for setting interest rates in the Bank of England Act 1998, the committee was designed to be independent of political interference and thus to add credibility to interest rate decisions. Each member has one vote, for which they are held to account: full minutes of each meeting are published alongside the committee's monetary policy decisions, and members are regularly called before the Treasury Select Committee, as well as speaking to wider audiences at events during the year. Purpose The committee is responsible for formulating the United Kingdom's monetary policy, most commonly via the setting of the rate at it which it lends to banks (officially the Bank of England Base Rate or BOEBR for short). As laid out in law, decisions are made with a primary aim of price stability, defined by the government's inflation target (2% per year on the Consumer Price Index as of 2016). The target takes the form of a "point", rather than the "band" used by the Treasury prior to 1997. The secondary aim of the committee is to support the government's economic policies, and help it meet its targets for growth and employment. That secondary aim was reinforced by then Chancellor of the Exchequer George Osborne in his March 2013 budget, with the MPC given more discretion to more openly "trade off" above-rate inflation in the medium run to boost other economic indicators. The MPC is not responsible for fiscal policy, which is handled by the Treasury itself, but is briefed by the Treasury about fiscal policy developments at meetings. Under the Bank of England Act 1998 the Bank's Governor must write an open letter of explanation to the Chancellor of the Exchequer if inflation exceeds the target by more than one percentage point in either direction, and once every three months thereafter until prices are back within the allowed range. It should also set out what plans the Bank has for rectifying the problem, and how long it is expected to remain at those levels in the meantime. In January 2009 the Chancellor announced an Asset Purchase Facility (APF), to be administered by the MPC, aimed at ensuring greater liquidity in financial markets. The committee had