Bank of England (BoE)

The Bank of England is the United Kingdom’s central bank, responsible for maintaining monetary and financial stability across the economy.

Founded in 1694, it sets the UK’s base interest rate, issues banknotes, and oversees the stability of the banking system. The Bank’s key roles include:

Monetary Policy: Managing inflation through interest rate decisions (via the Monetary Policy Committee, or MPC).

Financial Stability: Supervising banks and payment systems to reduce systemic risk.

Issuing Currency: Producing and managing the supply of UK banknotes.

Lender of Last Resort: Providing emergency liquidity to banks in distress.

Example:

If UK inflation rises above target (2%), the Bank of England may increase the base rate to slow spending and bring inflation back under control.

Used in:

Monetary policy, financial regulation, and the wider UK economic framework.