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 create money digitally to buy corporate and government bonds – this is known as asset purchase or quantitative easing (QE).