Oral question asked in the House of Lords, by Lord Barnett (Labour). It was answered on Wednesday, 19 January 2011.

Inflation

Question: My Lords, can the noble Lord confirm that he is not joining those who wrongly seek to pressurise the MPC to increase interest rates? Furthermore, as he cares about transparency, will he perhaps now take the opportunity to answer the Question for Written Answer that I put to him some time ago and tell us precisely what the Treasury representative on the MPC was instructed to say to the committee about the Treasury’s view on interest rates?

Answer: My Lords, I am very happy to confirm that the Government have every confidence in the MPC. They regard its independence as a cornerstone in making sure that the Chancellor’s inflation target is hit as far as it is in the power of the MPC to achieve it. That is what it is asked to do and there is absolutely no interference. As I have explained before, a representative of Her Majesty’s Treasury does indeed attend MPC meetings—not in any way to interfere with the independent deliberations of the MPC but to make sure that the committee is aware of relevant Treasury policy decisions, such as what is coming out of budgets. That is all I can say.

Secondary information