Kavan Choksi UK Briefly Discusses a Few Important Functions of the Bank of England (BoE)

The Bank of England or BoE is the ultimate national monetary authority in the United Kingdom, and serves as the central bank of the country. As per Kavan Choksi UK, BOE was established in the year 1694 and is headquartered in London. Its primary function was to act as the banker to the British Government. 

Kavan Choksi UK Underlines Some of The Most Important Functions of The Bank of England or BoE

The Bank of England (BoE) is widely 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 to encompass multiple sectors, like industry, agriculture, and government. The primary duties of the BoE are similar to that of almost any central bank. It oversees the monetary and financial situation of the economy.

Many people also refer to BoE as the Bank of Banks, as it supervises and controls the lending, borrowing, and daily operations of other banking institutions in the United Kingdom. The ownership of the BoE has shifted from private to public over three centuries. The BoE has also witnessed a series of decentralization and centralization of its functions.  They have an active role to play in maintaining financial stability and resilience during the financial crisis of 2008, Brexit, and diverse other economic fluctuations.

Important functions of the BoE include:

• The BoE focuses on maintaining monetary stability in the UK. This is achieved by maintaining stable prices and instilling confidence in the currency.
• The Bank of England has a monopoly in printing and issuing the Great Britain pound in the United Kingdom. It is also responsible for overseeing payments made with GBP by using debit/credit cards as well as digital payment systems.
• As a central bank, BoE has the responsibility to manage inflation through base interest rates. BoE’s monetary planning committee is responsible for setting official interest rates and controlling inflation in the country. 
• BoE acts as the government’s banker. It facilitates national transactions and manages government accounts. The gold and forex reserves of the country are also held by the bank.
• BoE is the lender of last resort in the United Kingdom, and it provides support to other private and public banks. It helps prevent other banks from going into bankruptcy and protects their clients.
• The financial planning committee of the BOE regulates and supervises other banks and insurance companies in the United Kingdom.

The Bank of England base rate, also known as the Bank Rate or official interest rate, represents the interest rate at which the BoE provides loans. In the opinion of Kavan Choksi UK, BoE can provide loans to discerning commercial banks and financial institutions operating within the United Kingdom. The BoE base rate is considered to be a fundamental tool that influences interest rates throughout the UK economy. Changes in the base rate have a direct impact on the borrowing costs for financial institutions, businesses and individuals.  The BoE interest rates have a huge role to play in shaping the monetary policy in the UK.