Forex Blog

The Bank of England, or BoE, should consider immediate publication of a record of the votes of each policy maker after the interest rate decision is announced, the Treasury Committee of the House of Commons said in a report Tuesday.

In the report titled “The Monetary Policy Committee of the Bank of England: ten years on”, lawmakers said, “We recommend changes to enhance the transparency of the MPC, including immediate publication of a record of the votes of each MPC member after MPC decisions are released, greater transparency of individual MPC members’ positions in the minutes of the MPC, and further work on improving the public’s understanding of monetary policy.”

Currently, the vote of the BoE’s nine-member strong Monetary Policy Committee is revealed in the minutes of the session that is released two weeks after the announcement of the decision.

Lawmakers felt that immediate transparency of MPC voting would allow financial markets to assess the strength of the support within the MPC for any given decision. Additionally, the Committee recommends that the central bank should immediately indicate the individual views of the MPC members after the decision.

The Committee expressed concern that at “the lack of understanding of monetary policy by the general public, especially given this potential for a less benign economic environment ahead”. “It is important that if there are more uncertain times ahead, the public must understand and support the reasons behind movements in interest rates”, the report said.

While extending strong support to the symmetry of the inflation target, the Committee asserted that it would watch out for any signs that “there appears to be either anti- or pro-inflationary bias by the Monetary Policy Committee”. The report added that lawmakers would seek explanation for such signs during regular hearings on Inflation Reports.

UK’s official inflation target is 2%. Latest data from the Office for National Statistics showed that annual inflation stood at 1.9% in July, much below the 2.4% witnessed in the previous month. The rate came in below the official target for the first time since March 2006.