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Revision as of 22:41, 18 January 2006
The Monetary Policy Committee (MPC) is a committee of the Bank of England, which meets every month to decide the official interest rate in the United Kingdom. It comprises:
- The Governor of the Bank
- The two Deputy Governors
- The Bank's Chief Economist
- The Executive Director for Market Operations
- Four external members, appointed by the Chancellor of the Exchequer
Each member has one vote, with the Governor holding the casting vote in event of a tie. Representatives from the Treasury can attend the meeting, but only in a non-voting capacity.
Meetings are held on the Wednesday and Thursday following the first Monday of each month. The interest rate decisions are announced at noon immediately following the Thursday meeting. In each meeting, the committee studies data relating to the UK economy, as well as the worldwide economy, presented by the Bank's economists and regional representatives. Decisions are made with a primary aim of price stability, defined by the government's inflation target, set each year in the Budget (for the 2004-2005 financial year, the target was 2 per cent on the consumer price index). The secondary aim of the committee is to support the government's economic policies, and targets for growth and employment.
Traditionally, it was the Treasury that set interest rates. The Bank was granted operational responsibility to set rates by Chancellor Gordon Brown on May 6, 1997, and the guidelines for this were formally laid out in the Bank of England Act 1998. The government reserves the right to instruct the Bank on what rate to set in times of emergency.
Membership
To date, 17 men and 4 women have served on the MPC. They are:
- Sir Edward George (June 1997 – June 2003)
- Howard Davies (June – July 1997)
- Mervyn Allister King (June 1997 – )
- Willem Buiter (June 1997 – May 2000)
- Charles Goodhart (June 1997 – May 2000)
- Ian Plenderleith (June 1997 – May 2002)
- David Clementi (September 1997 – August 2002)
- DeAnne Julius (September 1997 – May 2001)
- Sir Alan Budd (December 1997 – May 1999)
- Sir John Vickers (June 1998 – September 2000)
- Sushil Wadhwani (June 1999 – May 2002)
- Christopher Allsopp (June 2000 – May 2003)
- Stephen Nickell (June 2000 – )
- Charles Bean (October 2000 – )
- Kate Barker (June 2001 – )
- Paul Tucker (June 2002 – )
- Marian Bell (June 2002 – June 2005)
- Sir Andrew Large (September 2002 – )
- Richard Lambert (June 2003 – )
- Rachel Lomax (July 2003 – )
- David Walton (July 2005 – )
Mervyn King, the Bank of England’s current Governor, is the only MPC member to have taken part in every meeting since 1997.