Macro Economic Policies Adopted by the Bank of England

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The purpose of this study is to throw some light upon the functioning of the Central Bank, The Bank of England. The study tries to go in depth and have a look at the factors that are directly responsible for the ever changing policies of the Bank. The study tries to bring to light the whole regulation and the functioning of the Bank and the way it deals with various economic pressures, like Inflation, Deflation and Interest Rates.

Introduction

Government regulates many things in an economy including inflation, exports and imports, prices of many vital commodities, and many important economic aspects.
Government of England has entrusted the job of determining the monetary policy, in the hands of Bank of England. Bank of England looks into many other big issues. One of the most important issues is that of ensuring monetary stability in the economy, which can be achieved through a combination of stable prices of goods and services across the economy coupled with a low inflation level and level of confidence of the investors in the currency of the country. The Bank comes out with the monetary policy in order to ensure a certain key objectives like, delivering price stability with a low inflation level coupled with an objective to support the Government's economic objectives of growth and employment. Price stability is taken care of, by the Government's usual inflation target of 2%. There is a need to contemplate the crucial and critical role played by price stability in achieving the aforesaid economic stability, and in providing just the right conditions for a sustainable and longer living growth in output and employment. ...
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