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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:

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:

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 Sentence, 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

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