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<p>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 makes decisions on its policy tools, including quantitative
easing, in order to meet the 2% inflation target in the medium term.</p><p> </p><p>
</p><p> </p><p>The framework for the Asset Purchase Facility (APF), authorising it
to be used as a monetary policy tool, was set out in the exchange of letters between
the then Chancellor of the Exchequer and the then Governor of the Bank of England
on 29 January and 5 March 2009. The framework requires the Chancellor to authorise
the ceiling on total asset purchases by the APF, given the indemnity the Treasury
provides for the facility.</p><p> </p><p> </p><p> </p>
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