Which committee is tasked with setting the base rate in the UK?

The Monetary Policy Committee (MPC) is the committee responsible for setting the base interest rate in the UK. It operates under the Bank of England and is charged with the responsibility of formulating monetary policy to achieve the government's inflation target, which is typically set at 2%. The MPC meets regularly to review economic data and assess the current economic environment, making adjustments to the base rate as necessary to maintain price stability and support the economic objectives of the UK.

The MPC's actions significantly influence borrowing costs, consumer spending, and overall economic activity, underscoring its crucial role in the UK economy. By adjusting the base rate, the MPC manages inflation levels, supporting economic growth while targeting a stable financial environment for citizens and businesses alike.

Other committees mentioned do have significant functions, but their roles differ from that of the MPC. The Financial Policy Committee is focused on macroprudential regulation, the Banking Supervision Committee oversees bank stability and risk management, and the Investment Strategy Committee typically provides advice on investment policies and strategies rather than monetary policy itself.