The Governor reviews developments in the monetary policy framework since the first Loughborough Lecture on financial change and broad money, given by Robin Leigh-Pemberton ten years ago. The Governor describes the immediate aftermath of the abandonment of broad money targeting, and the United Kingdom’s experience with exchange rate targeting including the ERM. Finally, he describes the present monetary framework, based on an inflation target, and the role of the Bank of England in it.
Evolution of the monetary framework