Embargo: Immediate Thursday 19 October 2006

Contact: Owen Williams 020 7219 8659


The House of Lords Economic Affairs Committee are to conduct an inquiry into Britain's monetary policy.

The inquiry will see Mervyn King, Governor of the Bank of England and Chairman of the Monetary Policy Committee (MPC), give oral evidence to the Lords Committee on Tuesday 31 October.

The operation of monetary policy and control of interest rates was given over to the Bank of England's MPC by Gordon Brown as his first act on becoming Chancellor in 1997. Since then, the House of Lords Economic Affairs Committee has acted to provide some political and parliamentary accountability for the Bank's decisions by regularly undertaking inquiries into how monetary policy is working.

The Economic Affairs Committee, chaired by Lord Wakeham, will consider various aspects of monetary policy including:

€ What are the factors likely to affect inflation over the next year.

€ Should the MPC react differently to inflation caused by demand changes rather than supply shocks?

€ Should the Bank of England play a bigger role in appointing members of the MPC?

€ How have recent changes to the way GDP is calculated affected the decisions of the MPC?

€ Should the MPC be concerned about the behaviour of asset prices, especially house prices?

Mervyn King will be questioned on these and other areas of monetary policy as well as being asked to explain the MPC's decisions on interest rates over the last year.

Notes to Editors

1. The evidence session with Mervyn King will take place at 3.35pm on Tuesday 31st October 2006 in Committee Room 3 of The House of Lords.

2. The session will be broadcast live and be available to view/listen on demand at www.parliamentlive.tv

3. The Economic Affairs Committee's inquiry The Current State of Monetary Policy was launched on Thursday 19 October. The call for evidence can be found here: