Our Inflation Report hearings
121. One of the means by which the accountability
and transparency of the MPC is secured is through the regular
hearings held by the Treasury Committee into the Inflation Reports
of the Bank of England. Mr Saunders told us that "The testimony
to yourselves is a very important part of what they [the Monetary
Policy Committee members] do,"
and Lord George described our hearings as "terribly important"
in that it provides an "opportunity for us [the MPC] to explain
to the Treasury Committee what we were doing, and for individual
MPC members to explain their thinking".
122. While there was support for the meetings, some
thought more could be done. Ms Bell told us that "I think
that it is
the job of [the Treasury] Committee to be a
bit stronger in eliciting individual views".
Ms Lomax was more forthright, telling us that
I do think that you let members of the [Monetary
Policy] Committee off quite lightly. I come along to these sessions
with the Governor and most of the questioning goes to him.
123. Sir John Gieve noted that "The initial
hearing that you held with me was a completely different degree
of scrutiny from this Committee than I get coming with the Governor
from time to time".
The Governor was more flattering, telling us that during our meetings,
"I think that what has happened in the last ten years is
that we have a genuine and evolving dialogue on the state of the
economy and on whether monetary policy is being conducted in an
He pointed out that, unlike in the past, in his opinion, "It
is not a vehicle for you and others to score political points
and I think that is a big step forward as an observer of this
for over 15 years now".
However, he still thought that we "could perhaps do a little
more by way of asking us individually to explain why we had voted
the way we had in a sequence of recent months, but by and large
I think the debate that we have is a genuine discussion about
the state of the UK economy and the outlook for inflation".
On a different point, the Governor of the Bank of England also
requested that we hold hearings into the August Inflation Report,
so that the natural pattern of one each quarter was maintained.
We welcome the support we have received for our hearings into
Inflation Reports. However, we will seek to respond to suggestions
for improvement, including through greater questioning of all
members of the Monetary Policy Committee present and hearings
on August Inflation Reports.