CENTRAL BANK INDEPENDENCE AND INFLATION TARGETING - THE BRITISH EXPERIENCE

Abstract

Known as the ‘Old Lady’ of Threadneedle Street, the Bank of England is the central bank of the United Kingdom. Founded in 1694, the Bank of England is standing at the centre of the United Kingdom’s financial system, and is committed to promoting and maintaining monetary and financial stability as its contribution to a healthy economy. In our opinion, it is very important to analyze the Bank of England’s monetary policy strategy, starting from 1992 – adoption of the inflation target and the evolution of it’s monetary policy strategy, through an important feature – delegating operational accountability regarding the monetary policy in 1997 as well as the appropriate institutional framework. More over, it is important to analyze the Bank of England’s performances before and after granting central bank independence.

Keywords

• Monetary policy strategy
• central bank transparency
• central bank accountability
• inflation reports
• index of central bank independence and inflation targeting