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.

From:
HM Treasury
Published
14 February 2012
Last updated
21 March 2024 — See all updates

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 November 2023 requires that the open letter from the Governor should be published alongside the minutes of the following Monetary Policy Committee meeting. The letter should refer as necessary to the Bank’s latest Monetary Policy Report and forecasts. 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
  • 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

Published 14 February 2012
Last updated 21 March 2024 + show all updates

  1. Updated with: Open letters between HM Treasury and Bank of England, March 2024

  2. Updated with: Open letters between HM Treasury and Bank of England, December 2023

  3. Incorporating links to the latest remit for the Monetary Policy Committee (MPC).

  4. Updated with: Open letters between HM Treasury and Bank of England - September 2023

  5. Open letters between HM Treasury and Bank of England, June 2023 added

  6. Incorporating links to the latest remit for the Monetary Policy Committee (MPC).

  7. Open letters between HM Treasury and Bank of England, March 2023 added

  8. Open letters between HM Treasury and Bank of England, December 2022 added

  9. Updated with: Open letters between HM Treasury and Bank of England, September 2022

  10. Updated with: Open letters between HM Treasury and Bank of England, June 2022.

  11. Open letters between HM Treasury and Bank of England, March 2022 added

  12. Added: 'Open letters between HM Treasury and Bank of England, December 2021'

  13. Open letters between HM Treasury and Bank of England, September 2021 added

  14. Added: 'Open letters between HM Treasury and Bank of England, May 2021'

  15. Updated with 'Open letters between HM Treasury and Bank of England, September 2020'.

  16. Updated with 'Open letters between HM Treasury and Bank of England, June 2020'.

  17. Open letters between HM Treasury and Bank of England, December 2016 published

  18. August 2016 letters published

  19. May 2016 letters added

  20. February 2016 letters added

  21. November 2015 letter added

  22. Open letter from August 2015 added

  23. Open letter from May 2015 added.

  24. Open letter from February 2015 added.

  25. First published.

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