"This paper examines the performance of monetary policy under the new framework established in 1997 up to the end of the Labour government in May 2010. Performance was relatively good in the years before the crisis, but much weaker from 2008. The new framework largely neglected open economy issues, while the Treasury's EMU assessment in 2003 can be interpreted in different ways. The new framework may have contributed to some extent to the eruption and depth of the financial crisis from 2008, but monetary policy eventually responded in a bold and innovative way. Overall, the design and operation of monetary policy were much better than in earlier periods. But there is room for significant further evolution."

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