Policy Framework - Introduction
Monetary policy is about setting interest rates to control inflation. It sounds
straightforward enough. But to undertake the Interest Rate Challenge,
participants will need to have some understanding of what inflation
is and how it occurs. And they will need to know how interest
rates are used to control inflation - how monetary policy works.
This section provides some background to set teams on their
way. There is no need to know all the material back to front.
The aim is to give teams a flavour of what matters when interest
rates are set.
©2000-2008 Bank of England.
