The Bank of England is also responsible for settings the base interest rate for all lending in the UK. These decisions are made by the Bank's Monetary Policy Committee. This committee decides what interest rate they believe is necessary to control overall inflation in the UK economy.
This is part of the process necessary to maintain the integrity and value of the UK currency, and is part of the process to achieving price stability in the economy. The Bank implements this policy in the rate of interest it charges when it lends money to other banks and financial institutions.
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