MPs to review who sets UK interest rates
Key Points
- MPs are reviewing the Bank of England's 1997 interest rate independence
- Inflation has averaged 2.5% since 1997, down from 7.3% before it
- Inflation has been above target for 60 of the past 64 months
- The inquiry covers public debt, quantitative easing and the pound's value
- Evidence submissions close at 5pm on 6 November 2026
The Treasury Committee has launched an inquiry into whether the Bank of England should still set UK interest rates independently.
The Bank gained operational independence in 1997, when then-Chancellor Gordon Brown handed it control of interest rates.
Since 2009, it has also used quantitative easing and tightening, which involve buying and selling government bonds to influence borrowing costs.
CPI inflation has averaged 2.5% since independence, compared with 7.3% between 1967 and 1997, according to the committee.
Inflation has also sat above the Bank’s 2% target for 60 of the past 64 months.
The committee pointed to a far larger national debt than three decades ago as another reason to revisit the arrangement.
MPs will examine how independence has affected the UK’s fight against inflation and the credibility of its economy. They will also compare the Bank’s approach with central banks in other parts of the world.
“The country and the world has changed significantly since the Bank of England was given the powers to set monetary policy independently by Gordon Brown,” said Meg Hillier, chair of the Treasury Committee.
“Our Committee offers one of the most important and direct avenues for publicly scrutinising the Bank’s performance so I’d strongly encourage all of those with informed views and research to get in touch,” Hillier added.
What MPs want to know
The committee is seeking written evidence on 12 questions, including:
- Whether the Bank has used its independence effectively
- Whether independence has delivered stable prices, including during the inflation outbreak since 2021
- Whether higher public debt and quantitative easing have changed the case for independence
- Whether the Bank has overstepped its remit, or the government has undermined it
- How well the Bank is reforming its forecasting after the 2024 review led by former US Federal Reserve Chair Ben Bernanke
- Whether the Bank has given due weight to the value of the pound
