If inflation moves away from the target by more than 1 percentage point in either direction, the Governor is required to send an open letter to the Chancellor explaining why inflation has moved away from target and what action the Bank is taking to bring inflation back to target. (full story)

Dear Rachel, On 22 April 2026, the Office for National Statistics (ONS) published data showing that twelve-month inflation in the Consumer Prices Index (CPI) was 3.3% in March. This letter sets out the outlook for inflation and the policy action the Monetary Policy Committee (MPC) is taking to return inflation to the 2% target, along with other considerations required by the MPC’s remit when inflation moves away from the 2% target by more than 1 percentage point. Why has inflation moved away from the 2% target? At the time of the February Monetary Policy Report, there had been continued disinflation in domestic ... (full story)

Dear Andrew, CPI inflation Thank you for your letter of 30 April regarding the March Consumer Prices Index (CPI) figure. The twelve-month measure of CPI inflation was 3.3% in March, which triggered an exchange of open letters under the terms of the Monetary Policy Committee (MPC) remit. I acknowledge your projection in the April Monetary Policy Report that CPI inflation is expected to decline to 3.1% on average in 2026 Q2 before rising back to 3.3% in 2026 Q3 as a result of higher energy costs due to the Iran war. As you note, the MPC sets monetary policy to meet the 2% inflation target, and in a way that helps to ... (full story)