The inflation spike caused by external factors including the Ukraine war might be over, but the importance of interest rates to the UK economy isn’t going away. Continuing global instability and the newly elected Labour government’s commitment to growing the economy mean the Bank of England will have to stay on the lookout for signs of inflation returning.

Even beyond what level to set the country’s interest rate, however, the nine members of the Bank of England’s Monetary Policy Committee (MPC) face lingering questions about how to respond to serious criticism it has received in recent years.

The MPC has come in for flak on several fronts. Firstly, it has been accused of lacking diversity in terms of gender and politics. In response, the committee now has four female members. However, it has yet to include any direct representation from trade unions or consumer groups.

Secondly, there is a question mark over whether the actions of the MPC (like those of the government) have influenced inflation directly. In recent months, inflation has come down less through the effects of higher interest rates than by the downward trend in commodity prices. The MPC’s actions may be more performative than real in affecting high inflation........

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