Bank of England
The Bank of England (BoE) is the UK’s central bank. As well as being responsible for designing and printing banknotes, the institution sets the country’s interest rates and monitors the activity of other banks. Mark Carney is its current governor.
What the bank does
One of the bank’s biggest jobs is ensuring that the UK’s financial system is stable. Every year, it performs stress tests to see whether banks and insurance companies are prepared in the event of a financial crisis. The institution also oversees monetary policy, and it has the power to implement measures such as quantitative easing, which basically involves printing new money to stimulate spending and investment.
Another crucial role involves ensuring that payments made between the banks used by consumers and businesses run smoothly. According to the BoE, it settles transactions worth an average of £500 million every single day – and this is equivalent to a third of the UK’s gross domestic product.
Finally, the bank is responsible for ensuring that inflation, the rate at which prices of everyday items is increasing, stays at a consistent level of 2%. Every six weeks, a committee meets to decide whether its base rate – which impacts the interest rates charged by mainstream banks – should rise or fall in order to ensure that inflation doesn’t spiral out of control.
BoE’s history in brief
The Bank of England was originally founded in 1694 to fund a war against France, but its responsibilities have evolved over the years.
It moved to its current headquarters on London’s Threadneedle Street in 1734. In 1844, it became responsible for issuing bank notes in England and Wales (but not Scotland and Northern Ireland.) In 1946, the bank was nationalized, meaning that ownership fell into the UK government’s hands.
The Queen first appeared on banknotes in 1960. Finally, in 2016, the BoE unveiled polymer banknotes for the first time. Made out of thin plastic, these notes last longer than paper ones and are harder to forge.