The Bank of England or BoE is responsible for managing the monetary policy in the United Kingdom, as well as maintaining the supply of money in the economy. Kavan Choksi UK points out that the BoE is independent of the government. However, the government can appoint the members of the BoE and set the inflation target. Overall, the BoE has a critical role to play in the management of the UK’s financial sector and economy.

Kavan Choksi UK underlines the important functions of the BoE or Bank of England

The Bank of England (BoE) serves as the United Kingdom’s central bank. It is the ultimate national monetary authority of the country. The BoE is headquartered in London, and was established way back in 1694. Its primary function initially was to act as the banker to the British Government. Earlier the BoE was held privately by shareholders, and it was nationalized in 1946. It additionally became an independent public organization in 1998. This change enabled the BoE to enjoy a higher degree of operational independence when it came to carrying out its functions. The central bank of the UK is responsible for maintaining financial stability in the country, implementing monetary policies, as well as issuing and managing its currency (Great Britain pound).

The Bank of England is recognized as one of the most ancient modern banking institutions in the world. It originated from the necessity of financing the war efforts of the country. Over time, the BoE diversified its operations in order to encompass discerning sectors, like agriculture and industry. The primary duties of the BoE are similar to that of any central bank. It oversees the monetary and financial situation of the economy. The Bank of England base rate, also known as the official interest rate or the Base rate, is a fundamental tool for influencing interest rates throughout the UK’s economy. This basically is the interest rate at which the BoE provides loans to commercial banks and financial institutions operating within the United Kingdom.

The important functions of the Bank of England are:

• Monetary stability is among the primary concerns of the Bank of England. The bank achieves this goal by maintaining stable prices, as well as instilling confidence in the currency.
• The BoE has a monopoly in printing and issuing the Great Britain pound in the United Kingdom. The central bank of the UK oversees payments by making use of GBP using debit/credit cards and digital payment systems.
• Managing inflation through base interest rates is among the most essential functions of any central bank, including the BoE. The MPC or monetary planning committee of BoE is responsible for setting official interest rates and managing inflation.
• The BoE acts as a banker to the government, and facilitates national transactions. It manages government accounts, and also holds the country’s gold and forex reserves.

Kavan Choksi UK points out that the BoE is the lender of last resort in the country, and supports other public and private public banks from going into bankruptcy and protects their clients. The financial planning committee of the BoE is responsible for regulating and supervising other banks and insurance companies in the UK.