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Select committee: Economic Affairs Committee

Letter from the Rt Hon Jeremy Hunt MP, Chancellor of the Exchequer, to the Chair of the Economic Affairs Committee (30 January 2024)

Published 13 February 2024

Economic Affairs Committee Bank of England: how is independence working? Report on parliament.uk ↗

At a glance

The government's response

This document responds to 1st Report - Making an independent Bank of England work better.

This is the government's response, published 13 February 2024.

Summary written by Accountability Index from the government's response. It is not the government's own words.

The government says it "strongly agree[s]" that the Bank of England's independence should be preserved and agrees on the inflation target and fiscal alignment, but does not intend to follow several other recommendations.

  • It agrees that changing the inflation target "could damage the credibility of the UK to tackle inflation", and says it "will not change the definition of price stability".
  • On a memorandum of understanding between the Bank and the Debt Management Office, HM Treasury "considers that a memorandum of understanding would not effectively enhance these existing arrangements further".
  • On remit letters, the government does "not intend to publish draft letters", citing the risk of "extended periods of uncertainty". Going forward it will send a copy to the Chairs of the Lords Economic Affairs Committee and the Treasury Select Committee directly.
  • It has "no current plans to commission an independent review on public appointments", and gives its reasons for not publishing the Deed of Indemnity, citing "market sensitivities".

Read the government's response ↗ Report an error

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