The key task of economic research in the Bank is to increase our understanding of the economy and the financial system with models, tools and analysis relevant to the conduct of monetary policy and the maintenance of financial stability in the United Kingdom.
The Bank has some 200 economists trained to Masters and PhD level whose research benefits from close contact with academia. Research produced by its economists is published in the Working Paper Series, in internationally-refereed journals and presented at academic conferences. The Bank hosts regular conferences and workshops with other central banks, public organisations and academics, and runs seminar programmes in which academics and policymakers regularly present their research.
A principal objective of any central bank is to safeguard the value of the currency in terms of what it will purchase. Rising prices – inflation – reduces the value of money. Monetary policy is directed to achieving this objective and providing a framework for non-inflationary economic growth. As in most other developed countries, monetary policy usually operates in the UK through influencing the price of money – the interest rate. However, in March 2009 the Bank's Monetary Policy Committee announced that in addition to setting Bank Rate, it would start to inject money directly into the economy by purchasing assets - often known as quantitative easing. This means that the instrument of monetary policy shifts towards the quantity of money provided rather than its price.
Low inflation is not an end in itself. It is however an important factor in helping to encourage long-term stability in the economy. Price stability is a precondition for achieving a wider economic goal of sustainable growth and employment. High inflation can be damaging to the functioning of the economy. Low inflation can help to foster sustainable long-term economic growth. Hide