The Week Junior UK - Issue 189, 27 July 2019

The Week Junior•27 July 2019

O

n27July 1694, the Bank of England opened for

business.For325 years it has playedavital role

in how money is managed in the UK and it is one of

the most important financial organisations in the

world.Anew exhibition with 325 objects from the

bank’shistoryrece ntly opened inLondon, giving

visitorsaloo

Whatdoesthe BankofE nglan ddo?

The bank is the UK’scentral bank, which means it

makes sureother banksdon’t breakthe rules. It

provides services to the Government, such as looking

after its gold and providing it with foreign currency.

It issues the banknotes that people use every day to

buy things–and oversees production of the notes

that aremade in Scotland and Northern Ireland.

The bank alsocarries out the Government’splans

for thecountry’smoney.One of theways it does this

is to control the interestrate (alsocalled the bank

rate) for the UK. Interest is what people have to pay

if they borrow money,and what bankspay people

who save money with them. When the Bank of

England changes the interestrate, banksthat are

used by the public move their ownrates up or down

to follow it. If the interestrate is low,then people

tend to borrow moremoney to buy things. This

means thereismoremoney available for people

to buy the same amount of goods. However,when

thereismoremoney available, prices start to go up.

This iscalled inflation. The Bank of England must

ensurethat therate is neither too high nor too low

so that prices stay low and stable.

The bankcontrols

money in the UK.

The building on

ThreadneedleStreet.

JUSTIN PIPERGER/BANK OF ENGLAND

·ALAMY

·GETTY IMAGES

Gold in the Bank of England

The Bank of England has held gold

throughout its history because the metal

is worth so much money.The bank is the

second-largest guardian of gold in the

world;thereare around 400,000 bars of it

stored in thevaults. Only two of these bars

belong to the bank–the rest ar eowned

by the UK Government and other financial

organisations. During times ofwar, there

werefears it would be stolen by enemies.

So,from1780 until 1973,amilitary guard

protected the building overnight and would

be ready to defend it from any attacks.

DIDYOU

KNOW?

Thebank is known as the

Old Lady

ofThre

adneed

le

Street. In old

cartoons it

was

represent

edbyad

rawing

ofawoman.