What is monetary policy?
Monetary policy is action that a country's central bank or government can take to influence how much money is in the economy and how much it costs to borrow. As the UK’s central bank, we use two main monetary policy tools. First, we set the interest rate that we charge banks to borrow money from us – this is Bank Rate.
Second, we can buy bonds to lower the interest rates on savings and loans through quantitative easing (QE).