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<p>The UK does not have an exchange rate target. The UK’s monetary policy framework,
set out in the Bank of England Act 1998, gives operational responsibility for monetary
policy to the independent Monetary Policy Committee (MPC). The MPC has the primary
objective of maintaining price stability, defined as an inflation target of 2 per
cent as measured by the twelve month increase in the Consumer Prices Index. Under
the Government’s macroeconomic framework, the exchange rate is allowed to adjust flexibly,
and movements in sterling are determined by market forces.</p><p> </p>
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