monetary policy

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Monetary policy

Is the term we use to describe an increase in interest rates or a decrease in interest rates.
An increase/decrease in the money supply

What is the MPC?
Monetary policy Committee- interest rates are set by the banks MPC’s to help meet the inflation target.
Who is on the MPC?
Bank's Monetary Policy Committee (MPC) is made up of nine members – the Governor, the two Deputy Governors, the Bank's Chief Economist, the Executive Director for Markets and four external members appointed directly by the Chancellor

What do they do?
Each member of the MPC has expertise in the field of economics and monetary policy. Members do not represent individual groups or areas. They are independent. Each member of the Committee has a vote to set interest rates at the level they believe is consistent with meeting the inflation target. The MPC's decision is made on the basis of one-person, one vote. It is not based on a consensus of opinion. It reflects the votes of each individual member of the Committee.

What role does the chancellor have?
He is kept fully informed about the monetary.

How often do they meet? every month
How long do the meetings last?
2days
What is the structure for MPC meetings? a half-day meeting – known as the pre-MPC meeting – which usually takes place on the Friday before the MPC's interest rate setting meeting is taken place insight into current and future economic developments and prospects.
The monthly MPC meeting itself is a two-day affair. On the first day, the meeting starts with an update on the most recent economic data. A series of issues is then identified for discussion. On the following day, a summary of the previous day's discussion is provided and the MPC members individually explain their views on what policy should be. The Governor then puts to the meeting the policy which he believes will command a majority and members of the MPC vote. Any member in a minority is asked to say what level of interest rates

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