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43). All kinds of shocks affected prices; his brought the urge to control inflation through the rate of monetary growth. Thatchers government which took over in 1979 came up with various policies to curb the problem. Monetary policy is aimed at keeping inflation below 2½ per cent by the end of this Parliament. She placed emphasis on economic policies that reduced government intervention and also made it clear that fiscal policies were necessary to combat inflation in the country. The first step Thatchers government took was to push up interest rates whose intended effect was to decelerate the increase of money supply in the economy and in effect lower inflation. The inflation target approach to monetary policy and how the institutional changes to the framework of monetary policy. This was designed to enhance the transparency and openness of policy. The policy reduced the control of the government over the economy
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