The Queen's Speech: Bank Governor takes charge

Queen's Speech

Bank Governor takes charge

The Bank of England Bill sets out the new framework for monetary policy, after the Chancellor's announcement last week that he was handing over the responsibility for setting interest rates. A new Monetary Policy Committee at the Bank of England will decide the level of rates by majority vote each month, in order to meet the Government's inflation target. Gordon Brown is to set the target in next month's Mansion House speech and subsequently in each Budget.

The new committee will consist of the Governor and his deputy, a second deputy to be announced, two of the Bank's executive directors and four new appointments. It will answer to the Bank's Court of Directors, which will be reformed to incorporate a wider range of interests. The House of Commons Treasury Select Committee will also be able to scrutinise interest rate decisions. Diane Coyle