Written question asked by Lord Barnett (Labour), in the House of Lords. It was answered by Lord Sassoon (Conservative) on Monday, 7 March 2011.

Inflation

Question: To ask Her Majesty’s Government, further to the answer by Lord Sassoon on 16 February (Official Report, col. 648) saying he took ““the noble Lord's point about the nature of one-off rises”” in inflation, whether he was also referring to Lord Peston’s remarks about raising interest rates because of one-off rises in prices.

Answer: Decisions on the level of interest rates are that of the Monetary Policy Committee (MPC) of the Bank of England based on its judgment of the balance of risks to the inflation outlook in the medium term. The Bank discussed developments and prospects for inflation, including the effect of one-off and temporary factors, in the February inflation report. The objective of the MPC to maintain price stability is defined by a target of a 2 per cent rate as measured by the 12-month increase in the consumer prices index. The MPC therefore takes into account all factors that would affect the inflation rate over its forecast period.

Secondary information

Type: Written question
Reference: 7240; 725 c372WA
Session: 2010-12
Related items: Monetary Policy Committee
Wednesday, 16 February 2011
Oral answers to questions
House of Lords; Monetary Policy Committee
Wednesday, 16 February 2011
Oral questions
House of Lords
Subjects: Interest rates Inflation Monetary policy Monetary Policy Committee
Link: View this Written question on www.publications.parliament.uk