The Bank of England gained operational independence over interest rates in 1997. The change was announced by Chancellor of the Exchequer Gordon Brown shortly after the Labour government took office.
Under the new arrangement, the Bank's Monetary Policy Committee received responsibility for setting the official Bank Rate to meet an inflation target set by the government. The Bank of England Act 1998 placed the arrangement on a statutory footing and defined the committee's role.
The reform did not make the Bank independent of all government policy. The government continued to set the inflation target, while the Bank was given freedom over the instruments used to pursue it. This distinction separates operational independence from complete policy independence.