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and gained independence in 1997. nationalized on 1 March 1946. the Bank is committed to promoting and maintaining monetary and financial stability as its contribution to a healthy economy. the Bank was founded in 1694.About the Bank The Bank of England is the central bank of the United Kingdom. Sometimes known as the 'Old Lady' . . Standing at the centre of the UK's financial system.
But it is only since 1997 that the Bank has had statutory responsibility for setting the UK's official interest rate. . the Bank of England manages the UK's foreign exchange and gold reserves.monetary stability and financial stability. Since its foundation. it has been the Government's banker and.. since the late 18th century.Contd.the bankers' bank. As well as providing banking services to its customers. The Bank has had a monopoly on the issue of banknotes in England and Wales since the early 20th century. it has been banker to the banking system more generally . The Bank has two core purposes .
The MPC has to judge what interest rate is necessary to meet a target for overall inflation in the economy. Interest rates decisions are taken by the Bank's Monetary Policy Committee. .
Stable prices are defined by the Government's inflation target. A principal objective of any central bank is to safeguard the value of the currency in terms of what it will purchase.low inflation and confidence in the currency. Monetary stability means stable prices .Monetary Policy One of the Bank of England's two core purposes is monetary stability. . which the Bank seeks to meet through the decisions taken by the Monetary Policy Committee. Monetary policy is directed to achieving this objective and providing a framework for non-inflationary economic growth. Rising prices inflation reduces the value of money.
Monetary Policy Committee Interest rates are set by the Bank s Monetary Policy Committee. the two Deputy Governors. . the Bank's Chief Economist. The appointment of external members is designed to ensure that the MPC benefits from thinking and expertise in addition to that gained inside the Bank of England. the Executive Director for Markets and four external members appointed directly by the Chancellor. The Bank's Monetary Policy Committee (MPC) is made up of nine members The Governor.
The purpose is to ensure that the MPC is fully briefed on fiscal policy developments and other aspects of the Government's economic policies. They are independent. The Treasury representative can discuss policy issues but is not allowed to vote. . Each member of the Committee has a vote to set interest rates .The MPC's decision is made on the basis of one-person. Members do not represent individual groups or areas.Voting Each member of the MPC has expertise in the field of economics and monetary policy. A representative from the Treasury also sits with the Committee at its meetings. and that the Chancellor is kept fully informed about monetary policy. one vote.
particularly the Treasury Committee. The minutes of the MPC meetings are published two weeks after the interest rate decision. This includes a half-day meeting known as the pre-MPC meeting which usually takes place on the Friday before the MPC's interest rate setting meeting. The MPC goes to great lengths to explain its thinking and decisions.Meetings and Accountability The MPC meets every month to set the interest rate. Throughout the month. . They also record the votes of the individual members of the Committee. The Committee has to explain its actions regularly to parliamentary committees. the MPC receives extensive briefing on the economy from Bank of England staff.
Legislation& Governance The Bank was established as a corporate body by Royal Charter under the Bank of England Act 1694. governance. Various statutory provisions remain in force which are concerned with the Bank s organization. In some respects the framework was modified by the 2009 Banking Act. . The framework for governance and accountability is set by the 1998 Bank of England Act. the relevant provisions of which came into force on 1 June 2009. powers and functions.
The Committee Court of Directors Monetary Policy Committee Financial Stability Committee Remuneration Committee Risk and Audit Committee .
The People Governors and Directors Mervyn King Governor Charles Bean Deputy Governor Monetary Policy Paul Tucker Deputy Governor Financial Stability .
Executive Directors Andrew Bailey Spencer Dale John Footman Andy Haldane Paul Fisher Warwick Jones Graham Nicholson Jenny Scott .