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The Bank of England, established in 1694, serves as the central bank of the United Kingdom and is headquartered in London. Initially created to fund wars, it evolved into the nation's primary financial institution, assuming central banking responsibilities by the 19th century and becoming nationalized in 1946. Today, it manages public borrowing, issues banknotes, and advises the government on monetary policy while having the authority to set short-term interest rates since 1997.

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28 views1 page

162

The Bank of England, established in 1694, serves as the central bank of the United Kingdom and is headquartered in London. Initially created to fund wars, it evolved into the nation's primary financial institution, assuming central banking responsibilities by the 19th century and becoming nationalized in 1946. Today, it manages public borrowing, issues banknotes, and advises the government on monetary policy while having the authority to set short-term interest rates since 1997.

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Bank of England

central bank of United Kingdom

BY The Editors of Encyclopaedia Britannica | View Edit History


The Colonial Office in the Bank of England, unsigned watercolour by one of Sir John Soane's
draftsmen, c. 1818; in Sir John Soane's Museum, London.
Bank of England
See all media
Date: 1694 - present
Headquarters: London
Related People: Mervyn King Eddie George William Paterson Charles Montagu, 1st earl of Halifax
Bank of England, the central bank of the United Kingdom. Its headquarters are in the central financial
district of the City of London.

The Bank of England was incorporated by act of Parliament in 1694 with the immediate purpose of
raising funds to allow the English government to wage war against France in the Low Countries (see
Grand Alliance, War of the). A royal charter allowed the bank to operate as a joint-stock bank with
limited liability. No other joint-stock banks were permitted in England and Wales until 1826. This
special status and its position as the government’s banker gave the bank considerable competitive
advantages.

United Kingdom
READ MORE ON THIS TOPIC
United Kingdom: The sinews of war
…through the creation of the Bank of England (1694). The bank was a joint-stock company
empowered to discount bills and...
The bank was located first in Mercers’ Hall and then in Grocers’ Hall, but it was moved to its
permanent location on Threadneedle Street in the 1730s. By that time it had become the largest and
most prestigious financial institution in England, and its banknotes were widely circulated. As a result,
it became banker to other banks, which, by maintaining balances with the Bank of England, could settle
debts among themselves. The bank was threatened by the economic instability that accompanied the
French Revolution and Napoleonic Wars, but its standing was also considerably enhanced by its actions
in raising funds for Britain’s involvement in those conflicts.

During the 19th century the bank gradually assumed the responsibilities of a central bank. In 1833 it
began to print legal tender, and it undertook the roles of lender of last resort and guardian of the
nation’s gold reserves in the following few decades.

The bank was privately owned until 1946, when it was nationalized. It funds public borrowing, issues
bank notes, and manages the country’s gold and foreign-exchange reserves. It is an important adviser to
the government on monetary policy and is largely responsible for implementing the chosen policy by
its dealings in the money, bond, and foreign-exchange markets. The bank’s freedom of action in this
regard was considerably enhanced when it was given the power to determine short-term interest rates in
1997. The Bank of England is a member of the European Central Bank and part of its General Council.

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