Explainers

Want to learn more about money and how the economy works? Explore our knowledge bank of short explainers

Topics

Learn about the economy

Inflation and interest rates

Money, payments and spending

Banks, borrowing and saving

Most read explainers

When will we get back to low inflation? 

Inflation could fall to our 2% target in the next few months, before rising slightly again. We will keep interest rates high for long enough, so inflation settles at 2%.

Why are interest rates high and when might they fall?

We increased interest rates to slow down inflation. We won’t be able to cut interest rates until we’re confident that inflation will settle at 2%.

What are interest rates?

Interest is the cost of borrowing money or the reward for saving.

What is legal tender?

Many people are confused about what legal tender means. It’s actually about settling debts rather than how you can pay for things.

What is CBDC?

CBDC stands for central bank digital currency. It’s digital money a country’s central bank can issue alongside cash. If we introduced one, we’d call it the digital pound.

What is the Prudential Regulation Authority (PRA)?

The PRA supervises around 1,500 financial institutions including banks and insurance companies.
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The basics

What is money?

Feathers, stone wheels… even teeth. Money has taken many forms over time.

What is the economy?

It's a word you can't avoid. But when put on the spot, many people struggle to say what it means. So, where to start?

What does the Bank of England do?

The Bank of England is unlike banks you see on the high street or use for online banking. Instead, it is the central Bank of the UK.

What is inflation?

Inflation is the term we use to describe the increase in prices over time.

What is GDP?

Perhaps the most talked about economic concept. But what is it and how do we measure it?

What is the digital pound?

The digital pound would be a new type of money issued by the Bank of England alongside cash.

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