 |
answer text |
<p>The UK does not have an exchange rate target and the government does not have a
desired level for sterling – the rate is set by the market.</p><p> </p><p>Currency
markets move up and down and it would not be appropriate for the Treasury to speculate
on the impact of currency moves on the real economy. Any impact would necessarily
adjust over time and be sensitive to the broader economic and financial context. The
independent Monetary Policy Committee of the Bank of England has responsibility for
monetary policy. Its primary objective, set out in law, is to maintain price stability,
defined as a symmetric inflation target of 2 per cent, as measured by the twelve month
increase in the Consumer Prices Index. The separation of fiscal and monetary policy
is a key feature of the UK’s economic framework, so the Government does not comment
on the conduct or effectiveness of monetary policy.</p><p> </p><p>The pound currently
sits 12% and 10% below the 10-year average exchange rate against the dollar and euro
respectively.</p>
|
|
