Be more open over rates, MPs urge

The Monetary Policy Committee was created 10 years ago

A group of MPs have called for the Bank of England to be more transparent about the way interest rates are set.

The Treasury Select Committee says that the votes from the committee meeting which decides on the cost of borrowing should be made public immediately.

Currently there is a two-week delay from the announcement of an interest rate decision and the Monetary Policy Committee disclosing how members voted.

The MPs' committee said this can cause uncertainty in the financial markets.

'In the dark'

John McFall MP, chairman of the Treasury Select Committee, said a change of practice would help people anticipate rate decisions, rather than "being left in the dark".

"If the votes are known and the people who voted in a particular way are known, then a picture can be built up on those people and it can help people interpret the markets," he said.

He also called for each member of the Monetary Policy Committee to produce an annual report to the Treasury Select Committee.

This would give the public and financial markets a greater insight into the thinking of individual members, Mr McFall said.

In a new report marking 10 years since the creation of the MPC by then Chancellor Gordon Brown, the MPs praised its "admirable" track record of using interest rates to keep inflation on target.

However, Mr McFall warned against complacency.

"That does not mean it should rest on its laurels," he said.

"We have taken evidence that suggests that the next decade may not be as benign as the last."