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<p>The Bank of England (the Bank) has statutory responsibilities for monetary policy
and financial stability, and independence from the government to carry out these responsibilities
as enshrined in the Bank of England Act (1998). The Bank is accountable to both the
public and to Parliament, through scrutiny by the Treasury Committee.</p><p> </p><p>The
remit of the independent Monetary Policy Committee (MPC) is set by the Chancellor,
and is reaffirmed annually through an exchange of open letters with the Governor of
the Bank.</p><p> </p><p>The separation of monetary and fiscal policy is a key pillar
of the government’s macroeconomic framework. As such, the responsibility for financing
the government’s needs was transferred from the Bank to the UK’s Debt Management Office
(DMO), an executive agency of HM Treasury, in 1998. The Treasury sets the DMO’s objective
for debt management independently of monetary policy.</p><p> </p>
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