Measures Taken by the Current Labour Government to Enhance the Independence of the Bank of England

Between 1989 and 1991 the current labor government took steps to strengthen the independence of the Bank of England and New Zealand, Chile and Canada took the initiative to increase the independence of the central bank and in 1997 this new Followed the independence trend of the Bank of England. Set the interest rate. Since June 1997, the Bank has set up the Monetary Policy Committee (MPC) to meet monthly to determine interest rates.

We currently live in the 21st century, and we mainly use the currency (banknotes + coins) issued and controlled by government laws (law). In the UK, British banks were given the only right to issue bank notes in 1694. In 1913, the Federal Reserve Bank was granted the right to issue banknotes in the United States. In order to deal with the economic problems after World War I, the Reserve Bank of India was established on April 1, 1935, became an accrediting body to manage printing and distribution of Indian currency rupee after independence of India, Economic policy was drafted. Dominate the Indian economy

In May 1997, the Labor Government decided to act independently of the Bank of England. New Prime Minister Exchequer announced that the benchmark interest rate will be raised by 25 basis points as a major monetary policy tool, but unexpectedly announced that the Bank of England will be given benchmark interest rates to achieve inflation target. An important factor in judging the independence of the Bank of England is the success of the track record over time as compared to the clearly defined baseline. If the goals and achievements of monetary policy are publicly announced like the UK inflation targeting system, the adopted policy can not deviate from the benefit of society as a whole, but short-term political consideration can be avoided .