Discuss the role that the Bank of England plays within the UK economy. :: Economics

Discuss the role that the entrust of England plays within the UK economy.The Bank of England was founded in 1694 to act upon the government asits banker and debt-manager. Since it was founded, its role hasdeveloped and evolved into what we have today, with its role centredon the management of the nations monetary unit, the pound and it isthe infrastructure of the UKs financial system.(http//www.bankofengland.co.uk/ rough/ narration/index.htm visited 27thOctober 2005 last updated 12th June 2002 by Anon)The history of the Bank is one of great interest in this country, butalso of continuing relevancy and importance to the bank today. Eventsthat have taken place within the last three hundred years have helpedto shape and influence the role and the world(a) responsibilities ofthe Bank. The Bank has moulded the culture and traditions and theexpertise of the Bank as a central unit to the early years of the 21stcentury. Much of the history of the bank runs in tandem to thefinancial and eco nomic history of this country, and often too thepolitical history of the UK more generally.There have been many key points in the history of the Bank which haveguided its future in this country. In the early years the Bank systemwas weak in the rule of King William and magnate Mary. Over the yearsthough, various progressions have been made with the introduction ofloans, interest rates and various other things which make up the Banktoday.The Bank of England is controlled by the level of interest rates itsets via the manipulation of short term interest rates. This iscontrolled by the Monetary Policy Committee (MPC). If the MPC thinkthat the demand is set to train too fast, then they will increase theinterest rate, but if they think demand is growing at a slow rate, ormaybe blush possibly falling, they will then reduce the interest rate.This is known as the transmission mechanism.The MPC is made up of nine members. Five of them are from within theBank of England and include the Gove rnor and two Deputy Governors, theother four are called external members and are appointed by theChancellor. At each monthly confrontation the members vote on what theybelieve should happen to the interest rates. If the vote is equal,then the Governor of the Bank of England has the casting vote.There are many different versed consumer demand changes that willaffect the general public. Firstly there is consumer borrowing. Manyconsumers use this method to borrow money in the form of credit separate