Bank of England reviews practice of destroying MPC meeting tapes

The Bank of England is considering whether to keep recordings of key policy meetings following pressure from MPs.

The central bank has appointed Kevin Marsh, a former governor of the US Federal Reserve, to look at its practice of destroying tapes of meetings without keeping a transcript.

The move is a significant U-turn for the BoE, which had stoutly defended the routine in March after the Treasury select committee queried the practice.

Announcing the review by Kevin Warsh, a member of the Fed's board of governors from 2006 to 2011, Mark Carney, BoE governor, said the bank "look[ed] forward to gaining his perspective on this important issue".

The BoE has given Mr Warsh a wide remit. Apart from opining on the costs and benefits of publishing transcripts of Monetary Policy Committee meetings, he has been asked to consider how long after the monthly meeting publication should take place.

Fed transcripts of US monetary policy meetings have routinely been published since 1994 after a five-year delay.

The review will also consider other procedural changes to the MPC, whether other policy committees should be included in a publication scheme and "the relative merits of alternative ways of improving the transparency of policy discussions and decisions".

The BoE has asked Mr Warsh to take account of academic work on the subject and the views of stakeholders.

The volte-face came after MPs expressed shock last month at the bank's destruction of evidence when the minutes of the monthly meetings did not appear to reflect the range of views on the MPC.

Initially, the central bank stuck to its guns and defended its policy, which is more secretive than other parts of the UK government. In an unpublished statement, the BoE said transcripts were "very difficult to follow"; that any publication would hinder "free-flowing debate" and that the minutes already reflected "the full range of the MPC's debate".

This statement was rejected by Andrew Tyrie, the chairman of the parliamentary committee. He said: "This review is a welcome and essential step. It was very concerning for the committee to discover that the Bank's current practice was to destroy these records. Any practice other than retention and eventual publication would take a lot of justifying. We did not hear an adequate explanation for the present practice at the hearing on 11 March."

The BoE's review comes ahead of the hearing on the appointment to the MPC of Andy Haldane, the bank's new chief economist, at the Treasury Committee on Wednesday afternoon.

The hearing will indicate whether the coming changes to MPC personnel will make the committee more or less likely to raise interest rates soon.

MPC meetings are set to become more lively in the months ahead after data showed the economy growing fast and unemployment coming down faster than expected.

The MPC has indicated that it will raise interest rates when it feels a significant amount of the current spare capacity in the economy has been used up, but any rises will be gradual and interest rates are unlikely to reach a "normal" level of about 5 per cent in the foreseeable future.

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