Short Guide to Role of Bank of England

  1. Oversee whole monetary system. They are responsible for Monetary Policy
  2. This involves setting interest rates (base rates) to try and attain the government's inflation target.

 

Functions of Bank of England

1. Sole issuer of notes. The amount of cash printed depends upon the demand by consumers

2. It acts as a bank to:

3. Oversees banks

4. It oversees activities of banks and other financial institutions

5. Provides liquidity to banks

6.. It operates government monetary and exchange polic. In particular the Monetary Policy Committee MPC set interest rates (base rate) this rate determines mortgage and other interest rates throughout the economy. They look closely at future inflation and try to keep within the government's target of CPI 2% +/-1