Formal targets, central bank independence and inflation dynamics in the UK: A Markov-Switching approach

► In this study we examine the impact of certain policies on inflation uncertainty in the UK. ► We find that the formal inflation target palpably decreased uncertainty. ► Shadowing the DM and the ERM did not reduce uncertainty, however. ► Inflation Uncertainty was lower, in the UK, with a formal IT, than in the US, which has no formal IT.