Module name: Msc Money and banking

a) The UK central bank - Bank of England (the Bank) is responsible for keeping inflation low and stable. The UK Government has set the Bank a target of keeping inflation at 2%.

Critically discuss what central bank independence is and why it is suitable for modern monetary policy

decision. In the current case, what type of independence does the Bank of England have, and what is it meant to the Bank in terms of achieving its goals?