Select committee: Economic Affairs Committee
Conclusion 3
1st Report - Making an independent Bank of England work better
Published 27 Nov 2023
Paragraph 46
Economic Affairs Committee Bank of England: how is independence working? All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The interaction between fiscal and monetary policy requires clear lines of responsibility and effective communication between the Bank and HM Treasury to safeguard overall economic stability. It is important, particularly given the constraints of monetary policy, that when interest rates trend towards their zero lower bound HM Treasury promotes a fiscal stance which supports the inflation target it has set the Bank. The Government’s fiscal stance and the directions given to the Bank’s Monetary Policy Committee must work together. It is the Government’s job to ensure they are consistent with each other, not the Bank’s.
From: Economic Affairs Committee, 1st Report - Making an independent Bank of England work better, paragraph 46, 27 November 2023
Government response
A response document is linked to this report, dated 7 February 2024. Response attribution to this conclusion has not been verified. Read the response document ↗