HM Treasury has published the remit for the Bank of England's Monetary Policy Committee (MPC), reaffirming its primary objective of price stability and the 2% inflation target measured by the annual increase in the Consumer Prices Index (CPI). The Asset Purchase Facility will remain in place for the 2027-28 financial year and for as long as needed, consistent with the MPC's multiyear strategy set out on Sept. 17, 2026. The inflation target remains symmetric and applies at all times. The framework nevertheless allows temporary deviations where maintaining inflation at target could cause undesirable output volatility or exacerbate financial stability risks. The MPC should explain its policy response, the appropriate horizon for returning inflation to target and the trade-offs between inflation and output variability. If inflation moves more than 1 percentage point above or below target, the governor is expected to send an open explanatory letter to the chancellor. A further letter is required after three months if inflation remains more than 1 percentage point from target. These thresholds do not define a target range. The remit also provides for the use or unwinding of unconventional monetary policy instruments. Where interventions in specific markets or activities have implications for credit risk or credit allocation, the MPC is expected to work with the government to establish appropriate governance and accountability arrangements.

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