§ As now, my decisions on interest rates will be based on a careful assessment of monetary conditions and inflationary trends, focusing particularly upon the growth of narrow and broad money, changes in the exchange rate and movements in asset prices.
§ On the basis of these indicators, I felt able last week to reduce interest rates to 5½ per cent., the lowest level for 16 years. The effect of that is very marked. Since 1990, industry's interest bill has been slashed by nearly £12 billion each year, and the typical mortgage borrower is now paying £170 less each month. That is a massive boost to spending power, fully justified by the remarkable progress that we have made on inflation.
§ Starting with last week's change, I decided to give the Bank of England responsibility for the precise timing of interest rate movements. That underlines my commitment to the new framework for monetary policy established by my predecessor last September.