Monetary Policy Committee (United Kingdom)

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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. Minutes of each meeting, which explain the reasons for the decision and list the votes of each member, are published on the Bank's website after a two-week delay.

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 year from March 2006, the target was 2% 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, 19 men and 4 women have served on the MPC. They are:

Sir Edward George (June 1997 – June 2003)
Howard Davies (June – July 1997)
Mervyn King (June 1997 – 30 June 2008)
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 – 31 May 2006)
Charles Bean (October 2000 – 31 May 2007)
Kate Barker (June 2001 – 31 May 2007)
Paul Tucker (June 2002 – 31 May 2008)
Marian Bell (June 2002 – June 2005)
Sir Andrew Large (September 2002 – January 2006)
Richard Lambert (June 2003 – March 2006)
Rachel Lomax (1 July 2003 – 30 June 2008)
David Walton (1 July 2005 – 21 June 2006)
Sir John Gieve (16 January 2006 – 15 January 2011)
David Blanchflower (1 June 2006 – 31 May 2009)

Bold names indicate current membership of the committee. The dates listed show when their current terms of appointment are due to end.

HM Treasury announced on July 13, 2006 that Professor Tim Besley of the London School of Economics will join the MPC in September and Andrew Sentance, currently chief economist at British Airways, will join in October to fill the two current vacancies.

Mervyn King, the Bank of England’s current Governor, is the only MPC member to have taken part in every meeting since 1997.

External links