United Kingdom – The Bank of England (BOE)
BOE Structure
The structure of the Bank of England includes the Monetary Policy Committee or MPC for short. The MPC is a 9 member committee consisting of a governor, 2 deputy governors, 2 executive directors, and 4 outside economic experts.
The BOE is frequently touted as one of the most effective central banks in the world because they have never once defaulted on its debt. This is impressive because they have had a rather long history on the global financial scene.
The BOE meets monthly to discuss and adjust monetary policy. If they choose to meet more than once per month then this is an indication that there are some major concerns that the BOE is presently facing. These are times that traders get some really nice trading opportunities with lower risk than normal because the price tends to move further and stronger for much longer than it would do under normal circumstances. When the market gets concerned about something the price moves tend to be cleaner and more aggressive.
BOE Mandate
Their mandate is to maintain monetary and financial stability within the United Kingdom. The BOE monetary policy mandate is to keep prices stable and to maintain confidence in their currency. They want to have confidence in their currency because the UK does business with a large number of other countries. The UK is blessed with a very favourable geographic location that is great for international trade. To accomplish this they have an inflation target of 2%.
If inflation gets higher than the 2% level the central bank will look to curb inflation to a level below 2%. This will in turn prompt them to again take measures to boost inflation back up when they have achieved their goals. Most major central banks are targeting roughly 2% growth within their economies per year.