There have been six reports from the Treasury Select Committee, two reports from the House of Lords’ Committee on the MPC, reports by a commission of the Conservative Party and by the Liberal Democrats, a report by the Engineering Employers’ Federation, recommendations by many economists, including former MPC members, and, last but not least, the report commissioned by the Bank of England itself by Don Kohn, a senior staff member of the Federal Reserve Board and recently nominated by the President for appointment to the Board of Governors. Overall, the verdict on the Committee has been broadly positive. For example, in his 2001 review of the operation of  6  BIS Review 34/2002  monetary policy in New Zealand, Professor Lars Svensson describes the Bank of England and the Swedish Riksbank as examples of “best practice” monetary policy. Suggestions for improvement from the various groups cover the following areas: the definition of the inflation target; terms, appointments and composition of the membership of the MPC; arrangements for publication of the minutes; the forecast produced by the MPC; and, finally, a miscellaneous collection of technical matters. The precise definition of the inflation target, and its numerical value, can be debated at length. What is important is that the target is for inflation and not additional objectives that would lead to confusion about the Committee’s aims.
But the main focus of the Inflation Report is to present a collective view. To publish nine individual fan charts would hardly increase transparency, and the differences of judgment have to date been sufficiently small that it would be difficult for commentators to observe significant differences among those charts. This tension between the need to explain the diversity of members’ views, and the need to provide a clear rationale for the single decision, suggests that the Committee may need to explore further ways of putting across its collective view. It should be clear that there are both benefits and costs to a group decision-making process. The transparency and accountability of individual views helps to make better decisions. But it also complicates the communication of the decision to a wider audience, whose expectations of inflation matter for economic behaviour. The avoidance of confusion requires some forbearance by individual members of the Committee, and a clear understanding of which forms of communication are appropriate to explain individual views and which forms are suitable for explaining the reasons for a collective decision. I am sure that the Committee will learn more about how best to achieve this balance as time goes by. 4. Fourth, does the MPC require reform? Despite its youth, at least in central banking terms, the MPC has not suffered from lack of advice on how to improve itself.