Following sterling's suspension from the ERM, the objective of monetary policy remained the pursuit of price stability as a basis for sustainable growth, but a new framework for policy was required to replace that which had been provided by E RM membership. Under the new framework set out by the Chancellor, a wide range of indicators is to be considered in judging inflationary trends and whether the long-run target for underlying inflation, of 2% or less, is at risk. Specifically, during the remainder of this parliament, a target range of 1 %-4% has been set for underlying inflation, as measured by the 1 2-month growth of retail prices excluding mortgage interest payments, with the aim of being in the lower part of that range by the end of the current parliament. The target range for MO has been retained and a monitoring range for M4 adopted. The exchange rate also remains of major concern, given its importance in determining prices.