Promoting the good of the people of the United Kingdom by maintaining monetary and financial stability.
Its headquarters are in the central financial district of the City of London.
The BoE is also known as the “Old Lady’ of Threadneedle Street.” And as the world’s eight-oldest bank, it’s old. Over 300 years old.
Understanding the Bank of England (BoE)
Sometimes known as "the Old Lady of Threadneedle Street" in honor of its location since 1734, the BoE is the United Kingdom's equivalent of the Federal Reserve System in the United States. Its function has evolved since it was established in 1694, and it has been responsible for setting the UK's official interest rate since 1997.
The BoE was established as a private institution in 1694 to raise money for the government by issuing bonds. The BOE also functioned as a deposit-taking commercial bank. In 1844, the Bank Charter Act gave it, for the first time, a monopoly on issuing banknotes in England and Wales, thus taking a significant step toward being a modern central bank.
The gold standard was temporarily abandoned during World War II and entirely left in 1931. The BoE was nationalized in 1946, following the conclusion of World War II. In 1997, monetary policy authority was transferred from the government to the BoE and prohibited other banks from issuing their banknotes, making the BoE politically independent for the first time.1
Monetary Policy Committee
Interest rate policy is set by the Monetary Policy Committee (MPC), which has nine members. The MPC is led by the Governor of the Bank of England, a civil service post with the appointment usually going to a career bank employee. The three deputy governors for monetary policy, financial stability, and markets and policy serve on the committee as well as the BoE's chief economist. The final four members are appointed by the Chancellor of the Exchequer, who is equivalent to the Secretary of the Treasury in the United States.