Economics class: Bank of England faces its biggest inflation challenge since independence

This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.

Specification:

• Monetary policy

Click to read the article below and then answer the questions:

Bank of England faces its biggest inflation challenge since independence

• When was the Bank of England (BOE) granted operational independence?

• Why was the BoE granted independence?

• Distinguish between (i) inflation; (ii) disinflation; and (iii) deflation

• The article references Sir Mervyn King’s comment about the ‘NICE’ decade of growth. What was he referring to?

• Given that a monetary policy-induced recession is likely, evaluate whether the BoE should tighten monetary policy to tackle the big inflation overshoot

Gavin Clarke, Emmanuel College