Collection

HMT open letters between the Governor of the Bank of England and the Chancellor of the Exchequer

This document series contains open letters between the Governor of the Bank of England and the Chancellor of the Exchequer which are exchanged if inflation moves away from the target by more than 1 percentage point in either direction.

The remit for the Monetary Policy Committee (MPC) requires an exchange of open letters between the Governor of the Bank of England and the Chancellor of the Exchequer if inflation moves away from the target by more than 1 percentage point in either direction.

We believe that the open letter system, required in the remits for the MPC since 1997, provides a formal mechanism of transparency and accountability in the event of any appreciable deviations from target.

The remit set in January 2015 requires that the open letter from the Governor should be published alongside the first routine publication after the meeting of the MPC that follows the release of the Consumer Price Indices (CPI) data – i.e. minutes of the MPC meeting that followed the publication of the CPI data or, in relevant months, Inflation Report. The letter should refer as necessary to the Bank’s latest Inflation Report and forecasts, covering the MPC’s judgments on the trade-offs inherent in setting monetary policy. The reason for publishing the letter at that time is to allow the MPC time to form and communicate its strategy towards returning inflation to the target after consideration of the trade-offs, resulting in a more meaningful exchange about the MPC’s strategy. As has been the case since 1997, the Governor is required to send a further letter after 3 months if inflation remains more than 1 percentage point above or below the target.

The Governor’s letter should set out:

  • the outlook for inflation and the reasons why inflation has moved away from the target or is expected to move away from the target
  • the policy action the committee is taking in response
  • the horizon over which the committee judges it is appropriate to return inflation to the target
  • the trade-off that has been made with regard to inflation and output variability in determining the scale and duration of any expected deviation of inflation from the target
  • how this approach meets the government’s monetary policy objectives

Documents

  1. Open letters between HM Treasury and Bank of England, February 2018

    • Correspondence
  2. Open letters between HM Treasury and Bank of England, December 2016

    • Correspondence
  3. Open letters between HM Treasury and Bank of England, August 2016

    • Correspondence
  4. Open letters between HM Treasury and Bank of England, May 2016

    • Correspondence
  5. Open letters between HM Treasury and Bank of England, February 2016

    • Correspondence
  6. Open letters between HM Treasury and Bank of England, November 2015

    • Correspondence
  7. Open letters between HM Treasury and Bank of England, August 2015

    • Correspondence
  8. Open letters between HM Treasury and Bank of England, May 2015

    • Correspondence
  9. Open letters between HM Treasury and Bank of England, February 2015

    • Correspondence
  10. Open letters between HM Treasury and Bank of England, February 2012

    • Correspondence
  11. Open letters between HM Treasury and Bank of England, November 2011

    • Correspondence
  12. Open letters between HM Treasury and Bank of England, August 2011

    • Correspondence
  13. Open letters between HM Treasury and Bank of England, May 2011

    • Correspondence
  14. Open letters between HM Treasury and Bank of England, February 2011

    • Correspondence
  15. Open letters between HM Treasury and Bank of England, November 2010

    • Correspondence
  16. Open letters between HM Treasury and Bank of England, August 2010

    • Correspondence
  17. Open letters between HM Treasury and Bank of England, May 2010

    • Correspondence
Published 14 February 2012
Last updated 15 December 2016 + show all updates
  1. Open letters between HM Treasury and Bank of England, December 2016 published
  2. August 2016 letters published
  3. May 2016 letters added
  4. February 2016 letters added
  5. November 2015 letter added
  6. Open letter from August 2015 added
  7. Open letter from May 2015 added.
  8. Open letter from February 2015 added.
  9. First published.