Abstract: This book has been written to work on two levels. On the one hand, it provides a theory of monetary policy, focusing on the role of the central bank in determining and effecting policy. It also examines the relationship of the central banks to the public and private sectors. Both authors have extensive experience working in the Bank of England, and so are attempting to transfer this experience to the area of economic theory. The theoretical analysis is complemented by an examination of the successes and failures of monetary policy in the UK from the mid-1960s. As such, the book acts as an important work for students of economics and economic theory, but is also accessible to those involved in policy-making, journalism, and other interested parties.

Keywords: Bank of England, central bank, economic theory, exchange rates, fiscal policy, interest rates, monetary policy, private sector, public sector