Bank of England operational independence: has separating the responsibilities of fiscal and monetary policy worked?
On Tuesday 6 June, the Economic Affairs Committee will hold its next oral evidence session for its inquiry on the Bank of England: how is independence working?
At 3pm, the Committee will hear from:
- Charles Goodhart, Emeritus Professor of Banking and Finance at LSE
- Raghuram Rajan, Former Governor of the Reserve Bank of India
Topics the committee is likely to cover in this session:
- The extent to which the UK’s low inflation over much of the past 25 years can be attributed to the Bank’s operational independence?
- Whether central banks have fallen victim to groupthink and/or poor models.
- Whether expanded remits ask too much of the Bank and risk its politicisation.
- The balance between accountability and operational independence.
Meeting details
The committee’s work can be followed on its website and via Twitter.
2023 marks the 25th anniversary of the Bank of England Act 1998. This Act gave the Bank of England its independence and reformed the structure, responsibilities and functions of the Bank.
The Economic Affairs Committee is launching an inquiry to examine how operational independence is working. It will focus on the Bank’s role and remit; whether the governance structures of the Bank are appropriate; and how the Bank is being held accountable for its actions.
It will not look at individual policy decisions that the Bank has taken.