What it is
As the central bank of the UK, the Bank of England has two main objectives: price stability, primarily by achieving its inflation target, and financial stability, by overseeing the financial system. It sets the official Bank Rate, which influences interest rates across the economy, and uses tools like quantitative easing or quantitative tightening to manage the money supply. The BoE also issues banknotes and acts as a banker to the government and other banks.
Decisions by the Bank of England's Monetary Policy Committee (MPC) heavily influence the value of the British pound and the yields on UK government bonds (Gilts). These policy changes are closely watched by investors globally, as they reflect the economic health of one of the world's largest economies and can impact international trade and capital flows. Any rate-hike or rate-cut decision can significantly alter investment landscapes and consumer spending patterns within the UK and beyond.
Why it matters
The BoE's decisions directly impact UK interest rates, inflation, and the pound's value, affecting your investments and the broader global economy.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice