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The UK does not have an exchange rate target. The UK\u2019s 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\u2019s macroeconomic framework, the exchange rate is allowed to adjust flexibly, and movements in sterling are determined by market forces.<\/p>

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