Sunday 2 November 2008

UK: the Bank of England (Amendment) Bill

The Conservative peer Lord Saatchi has introduced a Private Members' Bill in the House of Lords. The purpose of his Bank of England (Amendment) Bill (HL) 2007-08 is to amend the Bank's role with regard to monetary policy by reducing the importance the Bank must attach to price stability.  It does this by removing the words "subject to that" which currently appear, as follows, in Section 11(b) of the Bank of England Act (1998):

In relation to monetary policy, the objectives of the Bank of England shall be—
(a) to maintain price stability, and
(b) subject to that, to support the economic policy of Her Majesty’s Government, including its objectives for growth and employment".

The Bill stands very little chance of becoming law, not least because the Government is pursuing its own proposals through the Banking Bill.  It's also not clear whether Lord Saatchi has the support of the Conservative Party front bench: we shall see when his Bill is debated at Second Reading (the date for which is not yet timetabled). 

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