Chapter 11
United Kingdom
The U.K. declined to join the economic and monetary union that gave birth to the continent’s common currency. As such, the country has maintained its own monetary policy and currency. In retrospect, that decision appears to have been beneficial to the country.
The Bank of England
The Bank of England has an explicit inflation target. The target currently stands at 2% and is set by the government. Each year in the budget, the Chancellor of the Exchequer announces the inflation target of the government. It has never been changed from 2% since this framework was born in 1997.
Operational independence was granted to the central bank in May 1997. If the national interest demands it, the government is able to direct the central ...
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