Monetary stability means stable prices and confidence in the currency. Stable prices are defined by the Government's inflation target, which the Bank seeks to meet through the decisions taken by the Monetary Policy Committee (MPC).
Monetary policy in the UK usually operates through the price at which money is lent – the interest rate. In March 2009 the MPC announced that in addition to setting Bank Rate, it would start to inject money directly into the economy by purchasing financial assets – often known as quantitative easing.
In August 2013 the MPC provided some explicit guidance regarding the future conduct of monetary policy. The MPC intends at a minimum to maintain the present highly stimulative stance of monetary policy until economic slack has been substantially reduced, provided this does not entail material risks to price stability or financial stability.
Low inflation is not an end in itself. It is however an important factor in helping to encourage long-term stability in the economy with sustainable growth and employment.
he Financial Policy Committee (FPC) was established under the Bank of England Act 1998, through amendments made in the Financial Services Act 2012. The legislation requires the FPC to prepare and publish a Financial Stability Report twice per calendar year. The Report covers the Committee’s view of the current stability of the UK financial system at the time of preparation of the Report and an assessment of developments that have influenced this view; an assessment of the strengths and weaknesses of the system and the risks to stability; and the Committee’s view on the outlook for the stability of the UK financial system. The Report also summarises the activities of the Committee over the reporting period and the extent to which policy actions taken have succeeded in meeting the Committee’s objectives.
Financial Stability Reports published prior to this year can be found by selecting the necessary 'Year' from the drop-down list below: