Questions relating to the Bank of England funds and functions

We publish details of a selection of requests made under the Freedom of Information Act 2000, and the information we disclose in response.

Date released:  22 January 2016

Disclosure:

As lender of last resort, can the Bank of England ever “run out” of sterling, given that it is a FIAT currency?  

In theory the Bank of England (the ‘Bank’) can create unlimited amounts of sterling.  One reason the Bank does not do that is the detrimental effect on the economy as a whole through increased inflation.  Carried to an extreme the creation of new money would render the currency worthless, as in the German Weimar Republic and more recently Zimbabwe, and a new currency would have to be introduced.  

How much does HM Government's Treasury owe the Bank of England?  

The Debt Management Office (‘DMO’) is responsible for the debt and cash management for the UK Government.  The DMO funds the debt by issuing Government bonds (known as ‘gilts’) and Treasury bills in the financial markets on behalf of the Government.  You will find information about this on the DMO’s website.  There is, however, a small balance in the Ways and Means advance to the National Loans Fund (which is administered by HM Treasury) on the Bank’s balance sheet.  ‘Ways and Means’ is the name given to a form of an overdraft facility and the outstanding balance is published in our Annual Report (Note 3, page 153). 

Can an UK citizen borrow directly from the Bank of England?  

As a central bank the Bank does not offer banking services to members of the public.

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