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Monetary Policy Under Labour

Published online by Cambridge University Press:  26 March 2020

Timothy Besley  and
Kevin Sheedy
Timothy Besley*
Affiliation:
London School of Economics
Kevin Sheedy
Affiliation:
London School of Economics
*
E-mail: [email protected]
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Abstract

This paper analyses Labour's record on monetary policy and the record of the MPC which it created. The paper begins by discussing the conceptual framework and institutions behind inflation targeting as it operates in the UK. We then discuss the successes that it enjoyed up to 2007 and debate the lessons that are being learned as a consequence of the experience since then. We then raise some of the formidable challenges that UK monetary policy must now face up to including maintaining the credibility of the inflation targeting regime in the face of greater interdependence between monetary and fiscal policy, and between monetary policy and support to the banking system and financial markets.

Keywords

Monetary policyinflation targetingUK macroeconomic policyE52E58E65
Type
Research Articles
Information
National Institute Economic Review , Volume 212 , April 2010 , pp. R15 - R33
Copyright
Copyright © 2010 National Institute of Economic and Social Research

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Footnotes

The authors would like to thank Paul Tucker and Martin Weale for helpful comments on an earlier draft and Gianni La Cava for research assistance.

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