Economic Affairs Committee launches new inquiry on the Bank of England

2023 marks the 25th anniversary of the Bank of England Act 1998. This Act gave the Bank of England its independence and reformed the structure, responsibilities and functions of the Bank.

The Economic Affairs Committee is launching an inquiry to examine how operational independence is working. It will focus on the Bank’s role and remit; whether the governance structures of the Bank are appropriate; and how the Bank is being held accountable for its actions.

It will not look at individual policy decisions that the Bank has taken.

The committee is seeking answers to the following questions:

Role and remit

• Is the Bank of England’s statutory framework still defined appropriately? If not, how should it be defined?
• What should be the role of secondary objectives in the remit of the Bank?
• Have revisions to the Bank’s role, statutory objectives and remits since it was made independent affected the Bank’s performance and operations; if so, how?
• How has the relationship between the Bank and the Treasury, as provided in the Bank of England Act 1998, worked in practice; and is that relationship still appropriate?
• Is the Bank of England’s mission to maintain monetary and financial stability affected by its Prudential Regulation Authority responsibilities; if so, how?

Governance and culture

• Do the Bank’s structures provide for a broad range of views in carrying out its functions?
• Is the role of the Court of Directors of the Bank adequately defined and understood? Does the Court function appropriately; if not, how should it change?
• Are the appointments processes to the Bank’s three policy committees, and the Court of Directors of the Bank, providing appropriate degrees of expertise, challenge and range of thought?

Accountability

• Has the right balance been struck between accountability and independence?
• Is there effective scrutiny and accountability with regards to the delivery of the objectives that the Bank of England is set; and are the Bank’s communications sufficiently clear and complete to ensure effective scrutiny?

The deadline for the submission of written evidence is midday on Thursday 13 April 2023.

Read the call for evidence and find out how to submit evidence.