§ Lord Higgins
asked Her Majesty's Government:
Further to the remark by the Lord McIntosh of Haringey on 17 June (H.L. Deb., col. 1563), whether it is their view that short-term interest rates have any effect on the money supply; and, if so, how the independent operations of the Bank of England in affecting the money supply are controlled by the Treasury. [HL2372]
§ Lord McIntosh of Haringey
The new monetary policy arrangements are very clear. The Government have the overall responsibility for the economic objectives and they set the inflation target. The Bank of England's Monetary Policy Committee (MPC) has the operational responsibility for setting interest rates to achieve the inflation target.