We all learn from our radios, televisions and newspapers, on the first Thursday of each month, that the Bank of England has announced its’ decision on the UK’s interest rates. But who are The Bank of England? We don’t see them nestling between the likes of Lloyds TSB, HSBC, Halifax and Nat West on our High Street; We don’t get offers of free current accounts and great credit card offers on the internet; so let’s have a look at this elusive institution and explain why they are wherever they are!
The Old Lady of Threadneedle Street
Otherwise known as “The Old Lady of Threadneedle Street”, the Bank of England was founded way back in 1694. It’s prime role back in the day was to act as banker and debt collector to the Government, a role it continues in today.
The original home of the Bank of England was in the Mercers’ Hall in Cheapside; it had a staff of seventeen clerks and two gatekeepers. Later in the same year it moved to the Grocers’ Hall in Princes Street, which became its home until 1734 when it acquired the current premises in Threadneedle Street. It has grown considerably on this site and today the Bank occupies some 3 acres and a huge windowless wall was built around the Bank Sir John Soames in 1828.
The Uk Monetary System
The Bank is responsible for the stability of our monetary system, hence the decision on interest rates, and is the UK’s central bank.
In overall control of the bank is “The Court of Directors”. They are responsible for managing the affairs of the Bank, other than the formulation of monetary policy. The Courtb s responsibilities under the Bank of England Act 1998 include determining the Bankb s objectives and strategy, and ensuring the effective discharge of the Bankb s functions and the most efficient use of its resources.
Monetary Policy Committee
The main financial decision making body with the bank is the MPC. Monetary Policy Committee whose primary function is to set the country’s’ interest rates and to assist the Government in realising their fiscal targets.
A Surprise Step
The “Old Lady” was nationalised on 1 March 1946, and on the 6th of May 1997, the then Chancellor of the Exchequer, Gordon Brown gave the Bank of England total independence from political control.
Standing at the centre of the UK’s financial system, the Bank is committed to promoting and maintaining monetary and financial stability as its contribution to a healthy economy.