The Drive for Independence
Published online by Cambridge University Press: 18 September 2020
After September 1992, the Bank was at the forefront of the search for a new policy framework. It pushed the idea of central bank independence, that was heavily supported by academic theory, as well as by the framework established in 1991 at the Treaty of Maastricht. The reform was driven by the new Governor, Eddie George, but also by Chief Economist Mervyn King. The Bank also defined its mission in terms of three core purposes, monetary stability, financial stability, but also the promotion of the efficiency and effectiveness of the UK financial services sector; and reformed its administrative organization – a move that was highly unpopular with its staff. The key to the new policy was an inflation target, established by the government, and implemented through regular meetings of the Chancellor of the Exchequer (at that time Kenneth Clarke) and the Governor of the Bank. These attracted considerable publicity, and were known as the Ken and Eddie show: it was often thought to be an exercise in which a hawkish Governor pressed for interest rate rises, which a doveish and politically sensitive Chancellor resisted.
To save this book to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Find out more about the Kindle Personal Document Service.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.