British parliamentarians opened an inquiry, this Friday (3), to review the independence of the Bank of England (BoE). Last year, some lawmakers already appeared to challenge central bank independence during the brief tenure of former Prime Minister Liz Truss.
The House of Lords Economic Affairs Committee (EAC) said the inquiry would not review policy decisions but would examine the BoE’s role and remit, as well as its governance and accountability structures.
Liz Truss said during her campaign for Conservative Party leadership last year that she planned to carry out an overhaul of the BoE. One of Truss’ supporters, Suella Braverman, who is now the UK’s home secretary, said the review would consider central bank independence.
Truss resigned less than two months into his term after his economic policies wreaked havoc on financial markets. No governmental review of the BoE has been undertaken.
In 2021, the EAC concluded, as part of a quantitative easing review, that the scale of the BoE’s purchases of government debt during the Covid-19 pandemic “began to erode the perception that the Bank acted entirely independently of political considerations”.
The committee said it would seek views on issues including the relationship between the BoE and Britain’s finance ministry, whether appointees to key committees had the right kind of expertise and the clarity of BoE communications.
Former BoE Governor Mervyn King and the Treasury’s top civil servant from 1998 to 2002, Andrew Turnbull, are among the members of the EAC.
The BoE gained independence in setting monetary policy in 1997. Legislation establishing these powers was enacted in 1998, making this year the 25th anniversary of the law.
Source: CNN Brasil
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.
