Oxford University Press - Online Resource Centres

Gillespie: Foundations of Economics 2e

Unit 28

Bank of England
"The Bank of England is the central bank of the United Kingdom. Sometimes known as the 'Old Lady' of Threadneedle Street, the Bank was founded in 1694, nationalized on 1 March 1946, and gained independence in 1997. 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."
For more information on issues such as the role of the Bank of England in controlling the UK financial system,  UK monetary policy and the UK inflation report visit

Having visited the site try and summarize:
• the bank's core purpose
• the key elements of UK monetary policy
You could also visit the
Bank of Japan www.boj.or.jp/en/index.htm
European Central Bank www.ecb.int/home/html/index.en.html

Inflation report
The Bank's quarterly Inflation Report was first published in 1993. The Report sets out the detailed economic analysis and inflation projections on which the Bank's Monetary Policy Committee bases its interest rate decisions, and presents an assessment of the prospects for UK inflation over the following two years.
The Report starts with an overview of economic developments; this is followed by five sections:
• analysis of money and asset prices
• analysis of demand
• analysis of output and supply
• analysis of costs and prices
• assessment of the medium-term inflation prospects and risks

Inflation targets
"The United Kingdom has experienced low and stable inflation over recent years. This has probably diluted memories of the high inflation and economic instability that once seemed to characterise the UK economy. This pamphlet explains why economic well-being depends on maintaining stable prices. It outlines the benefits of low inflation to business and the wider community and describes how the Bank of England undertakes the task of setting interest rates to meet the Government's inflation target."

Measures of inflation
To read about different measures of inflation see