Lord Taylor of Warwick – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Lord Taylor of Warwick on 2016-07-07.

To ask Her Majesty’s Government what steps they are taking to strengthen the British pound in the light of the result of the referendum on the UK’s membership of the EU.

Lord O’Neill of Gatley

The UK does not have an exchange rate target. The UK’s monetary policy framework 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.

Action by the government and the Bank of England over the last six years has substantially strengthened the resilience of the financial system. The contingency plans that the Treasury, Bank and Financial Conduct Authority put in place prior to the referendum have proved effective to date, and we will continue to monitor financial markets closely.