Frequently asked questions

Here you’ll find the answers to some of the questions we get asked most about the economy and what the Bank of England does.

General questions about the Bank of England

When was the Bank of England founded?

The Bank of England (sometimes known as the ‘Old Lady of Threadneedle Street’), was founded in 1694. The founding charter that stated its purpose was to ‘promote the public good and benefit of our people’. 

Who owns the Bank of England?

The Bank is a public sector institution that is wholly-owned by the government – the Bank’s entire share capital is held by the Treasury Solicitor on behalf of HM Treasury. 

The Bank of England is the central bank of the whole of the UK and was founded in 1694, nationalised on 1 March 1946, and gained operational independence to set interest rates in 1997. Part II of the Bank of England Act 1998 sets out our responsibilities and objectives in relation to monetary policy.

From 1694 to 1946 the Bank of England was a private bank with 17,000 shareholders, both individual and corporate. Under the Bank of England Act 1946, however, all such stock was transferred to the Treasury Solicitor. Former holders of stock were compensated by the allocation of an amount of stock created by HM Treasury for the purpose, known as '3% Treasury Stock 1966 or after’, which would yield them the equivalent income. 

Where do the Bank of England’s profits go?

Each year, we are required to submit our annual report and accounts to Parliament, via the Chancellor of the Exchequer. Half of any profits we make in our day-to-day business are paid over to the Treasury.

Why did the responsibility for financial regulation in the UK transfer to the Bank of England?

The financial crisis demonstrated the need for a new approach to financial regulation in the UK. This resulted in an expansion to our responsibilities, with the Prudential Regulation Authority (PRA) being formed. The PRA prudentially regulates and supervises banks, building societies, credit unions, insurers and major investment firms. Responsibility for the conduct of financial firms in the UK falls to a separate institution, the Financial Conduct Authority (FCA). 

Who appoints the Governor of the Bank of England? How long is the Governor’s term?

Governors of the Bank of England are appointed by the Queen on recommendation from the Chancellor of the Exchequer. The Financial Services Act 2012 established that the Governor of the Bank of England is to be appointed for a single term of eight years rather than the previous maximum of two five-year terms. However, the current Governor Mark Carney has said that he intends to step down in 2020.

General questions about banknotes

Who will be on the next £50 note?

In October 2018, we announced that we are going to issue a polymer £50 note. We expect it to enter circulation by the end of 2021. The mathematician Alan Turing will feature on it. We chose Turing using our character selection process.

Who will be on the next £20 note?

The artist JMW Turner will appear on the new £20 note, which will be issued on 20 February 2020.

Can you send me educational leaflets or posters about banknotes?

Copies of our educational leaflets and posters are available to download. Alternatively, fill out our educational materials online order form and we will send copies to you by post.  

Can I use a picture of banknotes on my product?

We have a set of rules around when and how images of our banknotes can be used. 

Find out more about using images of banknotes

Do you sell commemorative or souvenir banknotes?

We do not produce commemorative notes as such. Although the person depicted on the back of each might be said to be being celebrated, this is viewed in the long term, since the lives of individual Bank of England note designs are measured in years, rather than months, as opposed to the short-term special issues from some other banks.

I work for a cash machine company. Can we get samples of new banknotes to test?

We can give banknote equipment manufacturers access to test new banknotes before they are issued. For more information, email

How can I exchange old or damaged foreign banknotes?

We can only exchange old or damaged banknotes issued by the Bank of England. To exchange old or damaged foreign currency, you should contact the banknote issuer in the relevant country.

Where are the Bank of England’s banknotes printed?

All of our banknotes are printed at our printing works in Essex, by De La Rue.

How can people with visual impairments tell the difference between banknotes?

All of our banknotes have several features to help people with visual impairments to tell the difference between them. Each banknote denomination is a different size: the greater the value, the larger the banknote. There is also a densely coloured recognition symbol on the front of the paper £10 note in the form of an orange diamond. It also has a large numeral on the front. The £20 and £50 notes do not require a unique recognition symbol because the denomination numerals are prominently displayed in the clear white area of the notes.

The new polymer notes have similar features to the paper notes. They also have tiered sizing and include bold numerals and similar colour palettes to the paper banknotes. The polymer £10 and £20 notes will each have a tactile feature created by a series of raised dots. The polymer £5 note can be told apart because it does not have this feature.

Has the Bank of England considered using braille on banknotes to help blind or visually impaired people identify the different denominations?

We have investigated braille but understand from the Royal National Institute of Blind People that very few people now read braille. Braille is also language-specific, which also means any braille we used would only make sense in English.

Who decides who appears on new banknotes?

When we decide to issue a new banknote, members of the public can vote to nominate characters from a field that we have chosen. These characters are then considered by our Banknote Character Advisory Committee. The committee presents a shortlist to the Governor of the Bank of England, who makes the final choice. We used this process for the first time when we picked the character for the next £20 note, JMW Turner.

I have a banknote with a low serial number. How much is it worth? 

Certain examples of our notes may be of interest to collectors. We cannot advise in this respect, since banknotes are only ever ‘worth’ their face value to us. If you want to find out whether certain banknotes have any additional worth, we suggest that you approach a banknote dealer, details of which you can find online.

What does the ‘promise to pay’ on banknotes mean?

The words ‘I promise to pay the bearer on demand the sum of five [ten/twenty/fifty] pounds’ appears on all of our banknotes. This phrase dates from long ago when our banknotes represented deposits of gold. At that time, a member of the public could exchange one of our banknotes for gold of the same value. For example, a £5 note could be exchanged for five gold coins, called sovereigns. 

However, the value of the pound has not been linked to gold for many years, so the meaning of the promise to pay has changed. You can no longer exchange banknotes for gold. Bank of England banknotes can only be exchanged for other Bank of England banknotes of the same face value. 

We now maintain public trust in the pound through operating monetary policy.

Is it illegal to deface a banknote?

Under the Currency and Banknotes Act 1928, it is illegal to deface our banknotes (by printing, writing or impressing upon them words, letters or figures, etc). However, the question of whether or not to prosecute in individual cases is up to the police and the courts.

What does ‘legal tender’ mean?

‘Legal tender’ is a term that people often use, but when it comes to what can or can’t be used to pay for things it has little practical use.

Legal tender has a very narrow and technical meaning, which relates to settling debts. It means that if you are in debt to someone then you can’t be sued for non-payment if you offer full payment of your debts in legal tender.

What is classed as legal tender varies throughout the UK. In England and Wales, Royal Mint coins and Bank of England notes are legal tender. In Scotland and Northern Ireland, only Royal Mint coins are legal tender. Throughout the UK, there are some restrictions when using the lower value coins as legal tender. For example, 1p and 2p coins only count as legal tender for any amount up to 20p.

Whose signature appears on Bank of England banknotes? 

You can find the Chief Cashier’s signature on every one of our banknotes. Chief Cashiers sign banknotes on behalf of the Bank of England to demonstrate our promise to pay the value of the note for all time. The banknotes are periodically updated to reflect the current Chief Cashier’s name. There are a number of notes in circulation which bear the signatures of previous Chief Cashiers and remain legal tender.

How can I find out more information about regional banknotes issued in the Isle of Man, Jersey and Guernsey?

The Isle of Man, Jersey and Guernsey are outside the United Kingdom so they issue their own banknotes. You can find more information from the following sources:

What are local currencies and how do they work?

Some towns and cities in the UK have launched their own local currencies, often in the form of physical vouchers, which are aimed at encouraging people to spend more in the local area, and in particular at small businesses. 

These schemes all work in different ways, but it is important to remember that local currencies do not give you the same level of protection as Bank of England banknotes. Although local currencies may sometimes look like banknotes, they are not linked in any way to the Bank of England, and they are not legal tender. So if a local currency scheme fails, we cannot provide you with compensation.

Questions about polymer banknotes and the new £10 note

Which banknotes are changing to polymer?

We issued our first polymer banknote, the new £5 note, on 13 September 2016. We issued a new polymer £10 note on 14 September 2017 and will issue a new polymer £20 note on 20 February 2020. On 13 October 2018 we confirmed plans to issue a new polymer £50 note, which we expect to enter circulation by the end of 2021.

How long can I continue to use paper £20 notes?

You will still be able to use the paper £20 note until we withdraw it from circulation. We will announce the withdrawal date after we have issued our new polymer £20 note. We will give six months’ notice of this withdrawal date.  Many banks will accept withdrawn notes as deposits from customers. The Post Office may also accept withdrawn notes as a deposit into any bank account you can access at the Post Office. And, you can always exchange withdrawn notes with us.

How do I get a banknote with a low serial number?

We donate some banknotes with significant or low serial numbers to people or institutions that were involved in the development of the note or who traditionally receive a note when a new series is issued. For example, the Queen receives AA01 000001. 

We held a charity auction of banknotes with low or special serial numbers on 6 October 2017 and raised nearly £270,000 for our charities of the year (Haven House Children's Hospice and Macmillian Cancer Support) and a third charity that was nominated by our Notes Directorate (Candlelighters).

What is polymer?

Polymer is a durable yet thin and flexible plastic film made from polypropylene. It can be coated with layers of special ink, which carry the printed banknote design. The material also allows us to include clear ‘windows’ in the design, making polymer banknotes harder to counterfeit. Polymer is also better able to repel dirt, so notes stay cleaner for longer.

Why are the new banknotes made of polymer?

We decided to move to polymer notes because they are cleaner, safer and stronger than paper notes. Polymer notes are harder to counterfeit and increase the quality of notes in circulation. And, because they last around 2.5 times longer than paper notes, they are also more environmentally friendly.

Why are you changing the size of banknotes?

Our new polymer banknotes will be about 15% smaller than their paper equivalents. Our banknotes are large by international standards. Smaller notes mean less material will be used in production. This will reduce manufacturing costs and deliver environmental benefits. There are also some savings to the costs of storing and transporting banknotes.

We have changed the size of our banknotes a number of times, most recently between 1990 and 1994.

Which other countries use polymer banknotes?

Over 30 countries currently issue polymer notes. These include Australia (which introduced them in 1988), New Zealand, Mexico, Singapore, Canada and Fiji.

Can polymer banknotes be folded?

Yes. Polymer banknotes are as thin and flexible as paper banknotes, and they can easily be folded to fit into wallets and purses.

Do polymer banknotes carry germs?

Banknotes, like any other surface that large numbers of people come into contact with, can carry bacteria. However, the risks posed by handling a polymer banknote are no greater than those posed by touching any other common surface, like handrails, doorknobs or credit cards.

Can polymer banknotes melt at high temperatures?

No banknote material is indestructible. Polymer banknotes begin to shrink and melt at temperatures above 120° so they can be damaged by an iron, for example.

Do polymer banknotes stick together?

Brand-new polymer banknotes can sometimes stick together – as do brand-new paper notes – but this effect is short-lived once in use. New banknotes can be fanned or tapped on a hard surface to make them easier to count by hand or machine.

What is the environmental impact of polymer banknotes?

As part of our research into reviewing the benefits of printing notes on polymer compared with cotton-paper, and in line with our commitment to environmental sustainability, we commissioned an independent comparative environmental impact study in 2013. In this study, polymer showed benefits over cotton-paper for all the main phases of its lifecycle. For the majority (six from seven) of the indicators covered by the study, polymer notes have a lower environmental impact than cotton-paper notes.

This original study was carried out before we switched to polymer banknotes, and used projections to estimate the impact of printing polymer banknotes. So we decided to establish with certainty the carbon reduction benefits of polymer £5 and £10 notes, looking at the full lifecycle of greenhouse gas emissions. This encompassed their production, use in circulation and final disposal. This process involved a carbon footprint assessment by ThinkStep. The assessment further confirmed that both £5 and £10 polymer banknotes outperform paper banknotes.

PDFLifecycle analysis of paper and polymer banknotes - final study report

In both studies, polymer banknotes were conservatively judged to last 2.5 times longer than cotton-paper notes. This is the main factor leading to their strong environmental performance. This is mainly due to the reduced environmental burdens associated with raw material production and processing of new notes to replace unfit ones.

The results of the carbon footprint assessment were independently verified and certified by the Carbon Trust. This certification was completed in accordance to the PAS 2050 standard, which is an internationally recognised method for quantifying the carbon footprint of products. The Carbon Trust has certified that over their full lifecycle, the carbon footprint of a £5 polymer banknote is 16% lower than the £5 paper banknote, while the carbon footprint of a £10 polymer banknote is 8% lower than the £10 paper banknote.

Withdrawn banknotes

How do I exchange withdrawn banknotes?

All Bank of England banknotes keep their face value for all time. If your local bank, building society or Post Office is not willing to accept these notes, then they can be exchanged with the Bank of England in London. 

I live abroad and want to exchange withdrawn banknotes. How do I do this?

You can only exchange banknotes at the Bank of England in London. You can either do this in person during business hours, or by post. 

Is there a limit on the amount of withdrawn notes I can exchange?

There is no limit on the total amount of banknotes you can exchange. There is also no limit on the age of banknote you can exchange.

Is there a limit on the age of banknote I can exchange?

No, all Bank of England banknotes are worth their face value for all time, so you can exchange a banknote of any age.

Find out how to exchange withdrawn banknotes

I have a damaged banknote. What can I do?

Banknotes can become accidentally torn or damaged in a number of different ways. This doesn’t render them worthless because you can send them to us for reimbursement. 

Find out how to exchange a damaged banknote

How much notice does the Bank of England give before withdrawing a banknote?

Legally we are required to give one month’s notice of our intention to withdraw a banknote. The paper £10 note was withdrawn on 1 March 2018. We gave three months’ notice of the exact date.

Which £5 note was recently withdrawn?

The Bank of England £5 notes with a portrait of Elizabeth Fry on the reverse were withdrawn on 5 May 2017. These banknotes are sometimes referred to as the £5E series note. The £5 note featuring Sir Winston Churchill on the reverse, first issued into circulation in September 2016, still has legal tender status and can be used normally.

Which £10 note was recently withdrawn?

The Bank of England £10 notes with a portrait of Charles Darwin on the reverse were withdrawn on 1 March 2018. These banknotes are sometimes referred to as the £10 Series V note. The £10 note featuring Jane Austen on the reverse, first issued into circulation in September 2017, still has legal tender status and can be used normally.

What happens to old banknotes? Are they recycled?

Since 2011, the majority of our old paper banknotes have been recycled.  We use two methods of recycling, either composting the waste to create a soil improver for agriculture (as used in the treatment of food waste) or via a local energy recovery facility to generate electricity.  As composting is not suitable for polymer notes, we commissioned an independent third-party to conduct a lifecycle study assessing the environmental impacts of different waste treatment options. The study was conducted using the international standards ISO 14040:2006 and 14044:2006 for lifecycle assessment, and externally reviewed by a panel of industry experts. Recycling proved to be the most favourable option, as it comes with the lowest impacts for all the environmental impact indicators considered. As a result, we have secured a UK-based recycling solution, which will see polymer banknotes turned into pellets before being transformed into new plastic items such as plant pots.

Counterfeit banknotes

How do I check my banknotes are genuine?

Every one of our banknotes has a number of security features that you can use to check whether it is genuine or not. Take your time to check your banknotes, particularly if light conditions are poor or you are handling a large number of notes.

Never rely on just one security feature: no counterfeit banknotes successfully copy all of the security features.

What do I do if I get a fake banknote?

If you think you have a counterfeit banknote, you must take it to the police as soon as you can. They will provide you with a receipt and send the counterfeit to us for analysis. 

If the note is genuine, you will be reimbursed in full. However, counterfeit banknotes are completely worthless so we will not be able to reimburse you if you have received one of these. It is a criminal offence to hold or to pass on a banknote that you know to be counterfeit.

Don’t get caught out by counterfeiters: always check your banknotes.

Find out how to check your banknotes.

What type of UV lamp should I use to check that a banknote is genuine?

A good-quality ultraviolet (UV) lamp that emits light at around 365 nanometres is best for checking the fluorescent feature on the £5, £10, £20 and £50 notes. We don’t recommend using LED devices (such as key fob-type detectors), as most of these emit light at more than 365 nanometres.

Can I use a detector pen to check banknotes?

Detector pens work by reacting with the starch that is present in ‘normal’ wood pulp paper. So, while they can detect some (but not all) counterfeits printed on paper, they won’t detect counterfeits printed on polymer. Be careful, as old or dirty pens can be unreliable. 

Interest rates and monetary policy

Where can I find information on historical Bank Rates?

There is a spreadsheet which provides the official Bank Rate history.

What is the purpose of changing the Bank Rate?

The Monetary Policy Committee (MPC) here at the Bank of England is tasked with setting monetary policy to meet the Government’s inflation target of 2% (as measured by the 12-month increase in the Consumer Prices Index, ‘CPI’). In doing so, the MPC has to judge the outlook for the economy and inflation, and to decide what level of interest rates and other monetary policy measures will ensure inflation moves towards the target of 2% in the medium term.

Why does the Bank Rate move by 0.25%? 

The Monetary Policy Committee (MPC) can change the Bank Rate by as little or as much as they feel appropriate to meet their objective. Central banks tend to change the Bank Rate by 0.25%. However, this is not set in stone, nor does it form part our interest-setting remit.

When will interest rates change?

This is very difficult to predict. Interest rates are set by the Monetary Policy Committee (MPC). The MPC sets an interest rate with the aim of meeting the inflation target. However, changes in the interest rate take up to two years to have a full effect on the economy, so the MPC has to make a judgment on how the economy will be performing in two years’ time rather than on how it is performing now. 

Each member of the MPC has expertise in the field of economics and monetary policy. Members do not represent individual groups or regional areas. They are independent. Each member of the committee has a vote to set interest rates at the level they believe is consistent with meeting the inflation target. The MPC's decision is made on the basis of one person, one vote. It is not based on a consensus of opinion. It reflects the votes of each individual member of the committee.

Why can’t you set different Bank Rates for businesses and consumers?

When we change the Bank Rate, we are attempting to influence the overall level of activity in the economy in order to keep the demand for, and supply of, goods and services roughly in balance to meet the Government’s inflation target of 2%. 

If the economy is booming and there is a likelihood it could overheat, the MPC would probably tighten monetary policy by increasing the Bank Rate. The idea behind this is that commercial banks pass on these increases through the interest rates they charge for all borrowing. Regardless of whether it is borrowing for businesses or on residential homes, rates will normally increase across the board, impacting monthly loan repayments. The aim of this is to discourage spending. A higher Bank Rate will also potentially mean higher rates are offered on savings, making it more attractive to save, encouraging saving and again discouraging spending. This would impact the overall expenditure across the economy by putting a downward pressure on prices, which would gradually bring down the rate of inflation in line with our target. Two different Bank Rates would not achieve this outcome. 

Why is the target inflation rate 2% and not lower?

One of the reasons the target inflation rate is not lower than 2% is to allow for any errors in its measurement. Ideally we do not want the rate of inflation too close to zero, because consumer demand for goods and services may drop in anticipation of prices not increasing. This poses the risk of deflation. A target rate of 2% is more likely to achieve a positive rate of inflation than a target rate of 1%, for instance. 

The target inflation rate is set by the Chancellor of the Exchequer.

Does the Bank of England make more money when it increases Bank Rate?

As the central bank of the UK, the Bank of England does not have a profit-making objective. Our statutory objective is monetary (i.e. price) and financial stability. When the Bank Rate increases, our own profits and losses from interest receipts and payments generally cancel each other out. We pay interest at Bank Rate on the reserve accounts held at the Bank of England by banks and on the majority of other accounts held here. This forms our interest expense. 

For further information see our annual reports and accounts.

Does my bank have to pass on a change in Bank Rate?

Whether changes in Bank Rate are passed on to customers is entirely up to individual financial institutions. However, competition within the banking sector tends to bring this about. For us, the primary objective of changing the Bank Rate is to meet the Government’s inflation target of 2% (as measured by the 12-month increase in the Consumer Prices Index, ‘CPI’). This is what the Monetary Policy Committee (MPC) here at the Bank is tasked to do. 

By changing the Bank Rate, we are able to affect overall expenditure in the economy by influencing the interest rates commercial banks offer for borrowing and saving. However, we are not able to dictate to banks the actual rates they offer.

Why does my bank charge a higher interest rate for my mortgage than the official Bank Rate?

There may be differences in the interest rates different banks charge, and it is important to remember that this is a commercial decision for the institutions in question. They will offer commercial interest rates on loans and mortgages that are higher than the Bank Rate due to the fact that they do not receive all of their funding from the Bank of England and need to derive a profit from their activities.

Monetary Policy Committee (MPC)

What is the Bank of England’s monetary policy objective?

Our monetary policy objective, through the Monetary Policy Committee (MPC), is to deliver price stability – low inflation – and, subject to that, to support the Government’s economic objectives including those for growth and employment.

Who appoints the Monetary Policy Committee? 

Our Monetary Policy Committee (MPC) is made up of nine members – the Governor, the three Deputy Governors (for Monetary Policy, for Financial Stability and for Markets and Banking), the Bank's Chief Economist, and four external members who are all appointed directly by the Chancellor. The appointment of independent members is designed to ensure that the MPC benefits from thinking and expertise in addition to that gained inside the Bank of England.

What powers does the Monetary Policy Committee have?

As well as implementing a range of monetary policies such as quantitative easing, the Monetary Policy Committee (MPC) is tasked with setting the official Bank Rate. This is for our own market transactions with financial institutions – i.e. the rate at which we will make short-term loans to banks and other financial institutions. Changes in the official Bank Rate, of course, tend to affect the whole range of interest rates set by commercial banks, building societies and other financial institutions for their own savers and borrowers.

When does the Monetary Policy Committee meet?

The Monetary Policy Committee (MPC) currently meets eight times a year to set the interest rate. These changes follow the recommendations of the Warsh Review, and are set out in the Bank of England and Financial Services Act 2016. 

Ahead of each meeting, the MPC receives extensive briefing on the economy from Bank of England staff. This includes a half-day meeting – known as the pre-MPC meeting – that usually takes place the week before the MPC's interest rate setting meeting. 

The MPC meets over three days. At the first meeting, normally held on the Thursday before the MPC decision is published, members discuss their views on how to interpret the most recent economic data. At the MPC’s second meeting – the first of two policy meetings, normally held the following Monday – MPC members debate what the appropriate policy stance should be. 

The MPC’s final meeting – its second policy meeting – is normally held on the Wednesday. Following further discussion on the appropriate stance for monetary policy, the Governor puts to the meeting the policy that he believes will command a majority and members of the MPC vote. Any member in a minority is asked to say what level of interest rates they would have preferred. If there is an even split between the MPC members present, the Governor has the casting vote. The interest rate decision is published alongside the minutes of the MPC’s meetings at 12 noon on the Thursday.

Quantitative easing (QE)

How does quantitative easing (QE) work?

The Bank of England electronically creates new money and uses it to purchase gilts from private investors such as pension funds and insurance companies. These investors typically do not want to hold on to this money, because it yields a low return. So they tend to use it to purchase other assets, such as corporate bonds and shares. That lowers longer-term borrowing costs and encourages the issuance of new equities and bonds. This should, in turn, stimulate spending. When demand is too weak, QE can help to keep inflation on track to meet the 2% target. 

Quantitative easing does not, as is sometimes suggested, involve printing more banknotes. And QE is not about giving money to banks. Rather, the policy was designed to help businesses raise finance without needing to borrow from banks and to lower interest rates for all households and businesses.

Why has the Bank of England carried out quantitative easing (QE)?

Our programme of asset purchases (known as QE) injects money directly into the economy.  

This extra money is intended to support economic activity to bring future inflation back to the target. This means that the instrument of monetary policy shifts towards the quantity of money provided rather than its price (Bank Rate). But the objective of policy is unchanged – to meet the inflation target of 2% on the CPI measure of consumer prices. It is this same commitment to the inflation target that will ensure that the Monetary Policy Committee provides a measured stimulus that does not increase the supply of money beyond what is required to meet the inflation target.

These policies are aimed at boosting spending in the economy as a whole (and improving the function of financial markets). When we inject money into the economy, we do so with purchases of high-quality financial assets. We only purchase assets for which we can be sure there are long-term viable markets and for which the risk is known to be investment grade. For this reason, we have entered into asset purchases in the secondary market, for instance with insurance companies and pension funds that own and trade in high-quality financial instruments like gilts. 

Isn’t quantitative easing inflationary? Has quantitative easing worked?

Quantitative easing doesn’t involve ‘turning on the printing presses’ and flooding the economy with more banknotes, as it is sometimes portrayed. That would very likely create runaway inflation.

The objective of quantitative easing is to inject cash directly into the economy to stimulate demand and return inflation to target. At the time that quantitative easing was introduced, there was a real concern about going into a deflationary spiral, as we were in the midst of one of the worse recessions on record. With interest rates near zero and the economy stagnating, there was a real risk of low inflation or even deflation. By injecting money directly into the economy and therefore increasing spending, the aim was to push inflation back up towards the 2% target level.

It is difficult to tell if it has worked, and how well. However, economies that had programmes of QE such as the UK and the USA would appear to have fared better post-recession than those that did not. 

Why have you not bought assets from the general public?

We have not undertaken asset purchases with private individuals because experience with quantitative easing in Japan suggested that cash injections made directly with the general public did not have the intended effect. This was because a substantial amount of the extra liquidity was saved rather than spent – reflecting the economic uncertainty at a time of a recession. It is also unlikely that private individuals will be direct holders of large quantities of tradable investment-grade assets.

The approach we have adopted helps to ensure that, when the time comes for the Monetary Policy Committee (MPC) to exit the quantitative easing policy and begin asset sales, it will be better placed to withdraw the money injected into the economy. 

Why not give the money directly to companies or individuals?

When we buy assets under our quantitative easing programme, we receive something in return for the money we have created – typically government bonds. The idea of giving money directly to individuals without receiving anything in return, and on the basis that most of them would spend that money and thereby help the economy to grow, would be more properly a matter for the elected government, rather than the Bank of England. But, even so, the precedents for that kind of operation – what Milton Friedman would have called ‘helicopter drops’ – are not good. It may be that an operation like this would have the hoped-for effects, but it could also undermine faith in the fiscal and monetary framework. And, crucially, it cannot easily be reversed when the time comes to reduce the amount of money in the economy in order to prevent excessive inflation. In contrast, our quantitative easing policy is easily reversible when that is judged appropriate.

Financial stability 

Who regulates the UK financial system?

The financial crisis highlighted the importance of financial stability as a precondition for broader economic health and prosperity. Policymakers around the world recognised that focusing separately on price stability or keeping inflation under control and on supervising individual banks and building societies was not enough. There needed to be an authority to keep risks in check across the financial system as a whole. In the UK, the Bank of England’s Financial Policy Committee (FPC) was created by Parliament to fill that gap. 

The FPC works alongside the Prudential Regulation Authority (PRA) to look out for risks and weaknesses across the financial system, such as unsustainable levels of leverage, debt or credit growth.

The PRA is responsible for the safety and soundness of around 1,500 banks, building societies, credit unions, insurers and major investment firms.

The Bank of England is also responsible for regulating the infrastructure supporting the financial system. This includes the payment systems that let money flow around the economy to support payments for goods and services, and trading in the markets for shares and bonds.

A second institution, the Financial Conduct Authority (FCA), acts to prevent market abuse and ensures that consumers get a fair deal from financial firms. The FCA is not part of the Bank of England.

What can the authorities do if a bank goes bust?

It is important to remember that the regulatory system in the UK is not designed to ensure that no firm ever fails. 

The Bank of England is the UK’s resolution authority. Resolution is the process by which the financial authorities can intervene to manage the failure of a bank or building society in an orderly way. The aim is to ensure continuity of a firm’s critical economic functions and services provided to customers, and that the costs of failure are borne by shareholders and unsecured creditors rather than taxpayers.

Financial Policy Committee (FPC) 

What is the Financial Policy Committee?

The primary role of the Financial Policy Committee (FPC) is to identify, monitor, and take action against risks that threaten the resilience of the UK financial system as a whole. Subject to that, the FPC also supports the Government’s economic policy, including its objectives for growth and employment.

The FPC’s members are the Governor, the four Deputy Governors (who are all appointed by the Chancellor), the Chief Executive of the Financial Conduct Authority (FCA), the Bank’s Executive Director for Financial Stability Strategy and Risk (which is a Bank appointment), and five external members appointed by the Chancellor. There’s also a non-voting member from HM Treasury.

Why was the Financial Policy Committee created?

The financial crisis underlined how financial stability is a precondition for broader economic health and prosperity. Policymakers around the world recognised that focusing separately on price stability and on supervising individual firms was not enough. 

In the UK, the Financial Policy Committee (FPC) was created by Parliament to fill that gap. After nearly two years in interim form, the FPC was formally established in April 2013. The committee looks out for risks and weaknesses across the financial system, such as unsustainable levels of leverage, debt or credit growth.

How often does the Financial Policy Committee meet and how does it communicate?

The Financial Policy Committee (FPC) meets quarterly to a published schedule. Around a week after each meeting, the FPC publishes a statement, which sets out any new policy measures. A fuller record of the committee’s discussion and thinking is published two weeks after the policy meeting. Twice a year, the committee publishes a Financial Stability Report, which is a comprehensive assessment of the risks and outlook for the UK financial system.

What powers does the Financial Policy Committee have?

The Financial Policy Committee (FPC) has two key policy levers. These are its powers of direction and powers of recommendation. 

FPC directions are binding instructions on the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). The FPC can issue a direction to the PRA to make banks, building societies and large investment firms carry out the certain actions.

For banks, this includes powers to set capital requirements and the level for countercyclical capital buffers. Banks need enough capital, usually obtained from shareholders in return for a stake in the business, to provide a strong basis for their lending in case things go wrong. 

The FPC can also make recommendations. It can make recommendations on a ‘comply or explain’ basis to the PRA and to the FCA. This means that if the regulators decide not to implement a comply-or-explain recommendation, they are required to explain publicly their reasons for not doing so. The FPC can also make general recommendations to other bodies too.

The Prudential Regulation Authority (PRA) 

What is the Prudential Regulation Authority?

The Prudential Regulation Authority (PRA) is responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and major investment firms. The PRA has three statutory objectives:

  1. A general objective to promote the safety and soundness of the firms it regulates.
  2. An objective, specific to insurance firms, to contribute to securing an appropriate degree of protection for those who are or who may become insurance policyholders.
  3. A secondary competition objective.

What does the Prudential Regulation Authority do?

The Prudential Regulation Authority (PRA) focuses primarily on the harm firms can cause to the stability of the UK financial system. The PRA does not seek to operate a ‘zero failure’ regime, but rather seeks to ensure any firms that fail do so in a way that avoids significant disruption to the supply of critical financial services. 

Is the Prudential Regulation Authority responsible for making sure my bank treats me properly?

The Prudential Regulation Authority (PRA) is tasked with making sure that the banks and other financial institutions it is responsible for are safe and sound. The Financial Conduct Authority (FCA) seeks to ensure that consumers get a fair deal. It is also responsible for promoting competition and ensuring financial markets work well. 

How do I make a complaint about my bank?

The Financial Conduct Authority (FCA) provides information about how to make a complaint against your bank. If a consumer has a complaint that they have not been able to resolve against a bank, insurance company or financial firm, the Financial Ombudsman Service may be able to help. The ombudsman service is the official independent expert in settling complaints between consumers and businesses providing financial services. 

What protection do I have if my bank fails?

In the event that a Prudential Regulation Authority (PRA) or Financial Conduct Authority (FCA) authorised financial firm gets into difficulty, the Financial Services Compensation Scheme (FSCS) offers compensation to depositors and holders of insurance policies. The FSCS only covers business done by firms authorised by the FCA and/or the PRA.

How do I check if my bank is regulated by the Prudential Regulation Authority?

The Financial Services Register has details of all the financial firms authorised by the PRA or FCA.

Visit us and our museum

How do I organise a visit to look around the Bank of England? 

As the Bank is a working institution, it is not possible for members of the public to look around the building in Threadneedle Street. The only areas of the Threadneedle Street building accessible to the public are the museum and the banking counter where you can exchange out-of-date Bank of England notes. No other area of the Bank of England is open to the public.

The Bank of England Museum offers a variety of free talks and presentations for groups of between 15 and 50 people. Booking is essential. The audiovisual presentation ‘The Bank of England, Past and Present’ covers some of the more interesting architectural aspects of the building, as well as touching on the Bank’s role and responsibilities. 

Where is the Bank of England Museum? 

The entrance to the Bank of England Museum is on Bartholomew Lane, just off Threadneedle Street, London EC2R 8AH. 

Is there any parking near the Bank of England Museum? 

The Bank of England is in the middle of the City of London and parking is at a premium. For this reason we suggest that visitors travel to the museum by public transport.

Visit the Museum

What bus routes run near the Bank of England Museum? 

The following bus routes run past the Bank of England: 8, 11, 21, 23, 25, 26, 43, 76, 133, 141, 242 and 388. Bus routes 47, 48 and 149 run along Gracechurch Street, which is a five-minute walk from the Bank. 

What are the Bank of England Museum’s opening hours? 

The Bank of England Museum is open Monday to Friday, 10am to 5pm, with last entry at 4:30pm. The opening hours on 24 and 31 December (or nearest last working day before these dates) are 10am to 1pm. The museum is closed at weekends and on public Bank Holidays. 

The Museum is open on the Saturday of the Lord Mayor’s Show, and on two late evenings until 9pm for Museums at Night.

How much is entry to the Bank of England Museum? 

Entry to the Bank of England Museum is free. 

Do you provide guided tours of the Bank of England Museum? 

We don’t offer tours of the Bank of England Museum, but leaflets to help you get the most from your visit can be collected free of charge from the information desk on arrival. Activity sheets are also available for younger visitors. We also provide a number of presentations for pre-booked groups, including a ten to fifteen-minute introduction. Members of staff are always available to answer any questions you may have.   

How long does it take to look around the Bank of England Museum? 

Most people take about an hour to look around the Bank of England Museum. 

What facilities does the Bank of England Museum have? 

Due to space constraints, the Bank of England Museum does not have a café or restaurant. Toilet facilities (including a disabled toilet) are available. There is also a small shop which sells a variety of souvenirs. 

What arrangements are there for disabled visitors to the Bank of England Museum? 

We have a variety of facilities on offer to help visitors with disabilities. 

Accessibility at the Museum

What activities does the Bank of England Museum have for children? 

A number of our displays (including our interactive boat game and jigsaws) are suitable for our younger visitors. We also have activity sheets that can be collected from the information desk on arrival. During the school holidays we run events specifically for children.

View upcoming Museum events


Where can I find jobs at the Bank of England?

We have job opportunities for people at all different stages of their careers – from experienced professionals and PhDs, to graduates, interns and school leavers.

Careers at the Bank

How many people work at the Bank of England? What do they do? 

The Bank of England employs around 4,000 people across several locations, including Threadneedle Street, 20 Moorgate, Debden and other smaller offices located around the country.

There is a wide range of jobs at the Bank of England. Career opportunities are available for economists, policymakers, analysts, researchers, IT support, engineers, administrators, communications professionals, HR, facilities and security, to name but a few.

This page was last updated 10 October 2019
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