Monetary policy, control of inflation, and the supply of money are not under the control of the Government. All these concerns fall within the purview of the independent Bank of England, which has a target inflation rate of 2 percent. The inflation rate currently stands at .3 percent, easing the burden on families and businesses throughout the country.
The Monetary Policy Committee (MPC) sets Bank Rates at whatever level they deem appropriate. On 3 August 2016, the MPC voted unanimously to lower the Bank Rate to 0.25 per cent, where it has remained unchanged. Changing interest rates, along with quantitative easing, are some of the politics that the Bank of England employs to ensure economic growth and stability in the UK. I believe that, as a short term effort, these practices can be useful for the UK economy, increasing demand and economic growth. The long term impacts of quantitative easing and future changes in interest rates are less certain. We must carefully consider any issues of inflation that could occur as a result of these changes.
The Bank of England operates with regard to economic policy independent of Parliament and the Government to try to meet the Government’s objectives. I support the independence of the Bank of England, as it guarantees a long-term view and ensures that the appropriate policy decisions are chosen at the appropriate times.