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Bank of England meeting on February 8, 2018

Bank of England, BOE, pound, GBP

Bank of England, BOE, pound, GBPIn the meeting on February 8, 2018, the Bank of England (BoE) has maintained the overnight rate at 0.50%. You can download the Monetary Policy Summary and Minutes (in pdf format) at the end of the article.

The Bank of England is the UK's central bank and it is responsible for keeping the UK’s economy on the right track. One of the ways we do this is through monetary policy. It operates monetary policy by moving Bank Rate up and down and, in certain circumstances, it also supplement this with measures such as quantitative easing.  Decisions on monetary policy are made by the Monetary Policy Committee (MPC), which holds eight meetings a year.

Bank Rate is sometimes referred to as ‘the interest rate’, but it’s not quite the same as the interest you pay on debts or earn on savings. Bank Rate is the interest rate we charge when we lend to commercial banks. This influences the interest that banks pay to customers on savings and the interest they charge on mortgages, credit cards and other borrowings. Lower interest rates encourage people to spend more, increasing inflation, and higher interest rates do the opposite.

Inflation is the increase in prices over time. If prices are decreasing, this is called deflation.The Government sets us a target rate of inflation, which we aim to achieve through implementing monetary policy. The target rate is currently 2%, which means that prices should increase by 2% in a year compared to the previous year.

Quantitative easing is sometimes called ‘printing money’, but it doesn't involve printing new banknotes. When a central bank carries out quantitative easing,  it creates new money electronically and uses it to buy bonds. This ultimately encourages spending and investment, helping us to meet our 2% inflation target.

If you are interested, you can find all the previous Monetary Policy Summary and Minutes on the Bank of England website. You can check the meetings scheduled for 2018 of the world's leading Central Banks and the last Central Banks reports.

pdf, format, file, download Monetary Policy Summary and Minutes

 

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