Monetary policy in the UK

The authors argue that the institutional dimension of the Bank of England monetary policy and the role the UK HM Treasury assumes in this framework are both firmly based on the New Consensus in Macroeconomics (NCM). This is also the theoretical framework upon which the inflation targeting element of monetary policy is firmly based. This paper discusses these aspects of UK monetary policy, and then assesses the policy that has been pursued since 1997 (with some reference made to the period between 1992 and 1997 when a version of the framework was introduced). The strategy has been successful in terms of keeping UK inflation rates within the targets set by HM Treasury. However, a number of problematic issues are highlighted and discussed.