Oral question asked in the House of Lords, by Lord Peston (Labour). It was answered by Lord Sassoon (Conservative) on Tuesday, 8 November 2011.

Economy: Monetary and Fiscal Policy

Question: To ask Her Majesty's Government how they are co-ordinating monetary and fiscal policy in the current economic climate. My Lords, on behalf of my noble friend Lord Barnett, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

Answer: My Lords, the independent Monetary Policy Committee has operational responsibility for monetary policy. Fiscal policy is a competence of the Treasury. When making its monetary policy decisions, the MPC takes into account fiscal policy, among other factors, when judging the outlook for growth and inflation. A non-voting Treasury representative attends monthly MPC meetings and plays a key role in ensuring the appropriate co-ordination of fiscal and monetary policy. This includes, when appropriate, briefing the MPC on the Budget.

Secondary information