Editing Bank of England (section)

====Post-war nationalisation====
In 1946, shortly after the end of Montagu Norman's tenure, [[Bank of England Act 1946|the bank was nationalised]] by the [[Labour Party (UK)|Labour]] government. At the same time the number of Directors was reduced to sixteen (four of whom were full-time Executive Directors).<ref name="Hennessy1992" />

The bank pursued the multiple goals of Keynesian economics after 1945, especially "easy money" and low-interest rates to support aggregate demand. It tried to keep a fixed exchange rate and attempted to deal with inflation and sterling weakness by credit and exchange controls.<ref>{{Cite book |last=Fforde |first=John |title=The Role of the Bank of England and Public Policy 1941–1958 |date=1992 |publisher=Cambridge University Press |isbn=978-0-521-39139-9 |location=Cambridge}}{{Page needed|date=April 2022}}</ref>

[[File:London skyline 5.jpg|thumb|left|Bank of England New Change (bottom right) as seen from St Paul's]]
After the war, the very large Accountant's Department (which managed the stock side of the bank) moved back to London from Hampshire. Its designated office-space at Threadneedle Street, however, had in the meantime been taken over by the Exchange Control office. The department was instead provided with temporary accommodation (once more in Finsbury Circus), pending construction of a new building, which would occupy a two-acre [[bombsite]] immediately to the east of [[St Paul's Cathedral]]. 'Bank of England New Change' was designed by Victor Heal and opened in 1957 (at the time it was London's biggest post-war rebuilding project);<ref>{{cite web |title=Bank of England New Change |url=https://www.bankofengland.co.uk/CalmView/Record.aspx?src=CalmView.Persons&id=DS%2FUK%2F618 |website=Bank of England Archive |access-date=4 January 2024}}</ref> the new building contained several staff amenities alongside the office accommodation and, at street level, retail units were let to an assortment of businesses. The bank had the building on a 200-year lease; but with the advent of computerisation staff numbers were drastically reduced in the 1980s-90s; parts of the building were let to other firms (most notably the law firm [[Allen & Overy]]). The bank sold the building in 2000 and in 2007 it was demolished; [[One New Change]] now stands on the site.

The bank's "[[Bank of England 10 shilling note|10 bob note]]" was withdrawn from circulation in 1970 in preparation for [[Decimal Day]] in 1971.

[[File:United Kingdom bonds.webp|thumb|United Kingdom bonds 
{{legend-line|#012169 solid 3px|50 year}}
{{legend-line|#61D836 solid 3px|20 year}}
{{legend-line|#929292 solid 3px|10 year}}
{{legend-line|#F8BA00 solid 3px|2 year}}
{{legend-line|#C8102E solid 3px|1 year}}
{{legend-line|#FF95CA solid 3px|3 month}}
{{legend-line|#73FDEA solid 3px|1 month}}
{{see also|Inverted yield curve}}
]]
In 1977 the bank set up a wholly owned subsidiary called [[Bank of England Nominees|Bank of England Nominees Limited]] (BOEN), a now-defunct private limited company, with two of its hundred £1 shares issued. According to its memorandum of association, its objectives were: "To act as Nominee or agent or attorney either solely or jointly with others, for any person or persons, partnership, company, corporation, government, state, organisation, sovereign, province, authority, or public body, or any group or association of them". Bank of England Nominees Limited was granted an exemption by [[Edmund Dell]], Secretary of State for Trade, from the disclosure requirements under Section 27(9) of the Companies Act 1976, because "it was considered undesirable that the disclosure requirements should apply to certain categories of shareholders". The Bank of England is also protected by its [[royal charter]] status and the [[Official Secrets Act]].<ref>{{Cite news |date=2015-07-27 |title=27 July 1694: the Bank of England is created by Royal Charter |language=en-GB |work=MoneyWeek |url=https://moneyweek.com/27-july-1694-the-bank-of-england-is-created-by-royal-charter |url-status=live |access-date=2018-01-02 |archive-url=https://web.archive.org/web/20180103072524/https://moneyweek.com/27-july-1694-the-bank-of-england-is-created-by-royal-charter |archive-date=3 January 2018}}</ref> BOEN was a vehicle for governments and heads of state to invest in UK companies (subject to approval from the Secretary of State), providing they undertake "not to influence the affairs of the company".<ref>{{Cite web |title=Proceedings of the House of Commons, 21st April 1977 |url=https://api.parliament.uk/historic-hansard/written-answers/1977/apr/21/shareholdings-disclosure |url-status=live |archive-url=https://web.archive.org/web/20110627195641/http://hansard.millbanksystems.com/written_answers/1977/apr/21/shareholdings-disclosure |archive-date=27 June 2011 |work=[[Parliamentary Debates (Hansard)]] |date=21 April 1977 |access-date=1 June 2011}}; {{Cite news |title=Horses, stamps, cars – and an invisible portfolio |url=https://www.theguardian.com/uk/2002/may/30/jubilee.monarchy2 |location=London |work=The Guardian |date=30 May 2002 |access-date=17 December 2016 |archive-date=27 September 2016 |archive-url=https://web.archive.org/web/20160927190824/https://www.theguardian.com/uk/2002/may/30/jubilee.monarchy2 |url-status=live}}</ref> In its later years, BOEN was no longer exempt from company law disclosure requirements.<ref>{{Cite web |title=Proceedings of the House of Lords, 26th April 2011 |url=http://services.parliament.uk/hansard/Lords/bydate/20110426/writtenanswers/part021.html |url-status=live |archive-url=https://web.archive.org/web/20111122173255/http://services.parliament.uk/hansard/Lords/ByDate/20110426/writtenanswers/part021.html |archive-date=22 November 2011 |access-date=31 May 2011}}</ref> Although a [[dormant company]],<ref>{{Cite web |title=Bank of England Nominees Company Accounts |url=https://www.scribd.com/doc/56089866/BANK-OF-ENGLAND-NOMINEES-LIMITED-Company-accounts-from-Level-Business |url-status=live |archive-url=https://web.archive.org/web/20161201024434/https://www.scribd.com/doc/56089866/BANK-OF-ENGLAND-NOMINEES-LIMITED-Company-accounts-from-Level-Business |archive-date=1 December 2016 |access-date=8 September 2017}}</ref> dormancy does not preclude a company actively operating as a nominee shareholder.<ref>Fire example, {{Cite web |title=Nominee Service |url=http://www.pilling.com/Nominee-Service.htm |url-status=dead |archive-url=https://web.archive.org/web/20120425051438/http://www.pilling.com/Nominee-Service.htm |archive-date=25 April 2012 |access-date=12 September 2011 |publisher=Pilling & Co. Stockbrokers Ltd.}}</ref> BOEN had two shareholders: the Bank of England, and the Secretary of the Bank of England.<ref>{{Cite web |title=Freedom of Information Act response regarding Bank of England Nominees Limited |url=http://www.whatdotheyknow.com/request/28738/response/74019/attach/2/D.pdf |url-status=dead |archive-url=https://web.archive.org/web/20160828072151/https://www.whatdotheyknow.com/request/28738/response/74019/attach/2/D.pdf |archive-date=28 August 2016 |access-date=31 May 2011}}</ref>

The [[reserve requirement]] for banks to hold a minimum fixed proportion of their deposits as reserves at the Bank of England was abolished in 1981: see {{Format link|Reserve requirement#United Kingdom}} for more details. The contemporary transition from Keynesian economics to Chicago economics was analysed by [[Nicholas Kaldor]] in ''The Scourge of Monetarism''.<ref>{{Cite book |url=https://books.google.com/books?id=cj6wAAAAIAAJ |title=The Scourge of Monetarism |date=1 January 1982 |publisher=Oxford University Press |isbn=9780198771876 |access-date=19 August 2016 |archive-url=https://web.archive.org/web/20210427043307/https://books.google.com/books?id=cj6wAAAAIAAJ |archive-date=27 April 2021 |url-status=live}}</ref>

The handing over of monetary policy to the bank became a key plank of the [[Liberal Democrats (UK)|Liberal Democrats]]' economic policy for the [[1992 United Kingdom general election|1992 general election]].<ref>Liberal Democrat election manifesto, 1992.</ref> [[Conservative Party (UK)|Conservative]] MP [[Nicholas Budgen]] had also proposed this as a [[private member's bill]] in 1996, but the bill failed as it had the support of neither the government nor the opposition.

The UK government left the expensive-to-maintain [[European Exchange Rate Mechanism]] in September 1992, in an action that cost HM Treasury over £3 billion. This led to closer communication between the government and the bank.<ref name=":0" />

[[File:Uk inflation history.webp|thumb|300px|right|UK inflation history since 1960 {{see also|1976 sterling crisis}}]]
In 1993, the bank produced its first ''Inflation Report'' for the government, detailing inflationary trends and pressures. This annually produced report remains one of the bank's major publications.<ref name=":0" /> The success of [[inflation target]]ing in the United Kingdom has been attributed to the bank's focus on transparency.<ref name="IMF01">{{Cite web |title=Targeting Inflation: The United Kingdom in Retrospect |url=https://www.imf.org/external/pubs/ft/seminar/2000/targets/strach7.pdf |url-status=live |archive-url=https://web.archive.org/web/20170123074911/https://www.imf.org/external/pubs/ft/seminar/2000/targets/strach7.pdf |archive-date=23 January 2017 |access-date=31 October 2016 |publisher=International Monetary Fund}}</ref> The Bank of England has been a leader in producing innovative ways of communicating information to the public, especially through its Inflation Report, which many other central banks have emulated.<ref name="NBER01">{{Cite web |title=Inflation Targeting Has Been A Successful Monetary Policy Strategy |url=https://www.nber.org/digest/apr98/w6126.html |url-status=live |archive-url=https://web.archive.org/web/20161031214632/http://www.nber.org/digest/apr98/w6126.html |archive-date=31 October 2016 |access-date=31 October 2016 |publisher=[[National Bureau of Economic Research]]}}</ref>

The bank celebrated its three-hundredth birthday in 1994.<ref name=":0" />

In 1996, the bank produced its first ''Financial Stability Review''. This annual publication became known as the ''Financial Stability Report'' in 2006.<ref name=":0" /> Also that year, the bank set up its [[real-time gross settlement]] (RTGS) system to improve risk-free settlement between UK banks.<ref name=":0" />

On 6 May 1997, following the [[1997 United Kingdom general election|1997 general election]] that brought a Labour government to power for the first time since 1979, it was announced by the Chancellor of the Exchequer, [[Gordon Brown]], that the bank would be granted operational independence over monetary policy.<ref>{{Cite journal |last1=Sattler |first1=Thomas |last2=Brandt |first2=Patrick T. |last3=Freeman |first3=John R. |date=April 2010 |title=Democratic accountability in open economies |journal=[[Quarterly Journal of Political Science]] |volume=5 |issue=1 |pages=71–97 |citeseerx=10.1.1.503.6174 |doi=10.1561/100.00009031}}</ref> Under the terms of the [[Bank of England Act 1998]] (which came into force on 1 June 1998) the bank's [[Monetary Policy Committee (United Kingdom)|Monetary Policy Committee]] (MPC) was given sole responsibility for setting interest rates to meet the Government's [[Retail Prices Index (United Kingdom)|Retail Prices Index]] (RPI) inflation target of 2.5%.<ref>{{Cite web |title=Key Monetary Policy Dates Since 1990 |url=http://www.bankofengland.co.uk/monetarypolicy/history.htm |url-status=live |archive-url=https://web.archive.org/web/20070629143630/http://www.bankofengland.co.uk/monetarypolicy/history.htm |archive-date=29 June 2007 |access-date=20 September 2007 |publisher=Bank of England |df=dmy}}</ref> The target has changed to 2% since the [[Consumer Price Index (United Kingdom)|Consumer Price Index]] (CPI) replaced the Retail Prices Index as the Treasury's inflation index.<ref>{{Cite web |date=10 December 2003 |title=Remit of the Monetary Policy Committee of the Bank of England and the New Inflation Target |url=http://www.bankofengland.co.uk/monetarypolicy/pdf/chancellorletter031210.pdf |url-status=live |archive-url=https://web.archive.org/web/20070926052337/http://www.bankofengland.co.uk/monetarypolicy/pdf/chancellorletter031210.pdf |archive-date=26 September 2007 |access-date=20 September 2007 |publisher=HM Treasury}}</ref> If inflation overshoots or undershoots the target by more than 1% the Governor has to write a letter to the [[Chancellor of the Exchequer]] explaining why, and how he will remedy the situation.<ref>{{Cite web |title=Monetary Policy Framework |url=http://www.bankofengland.co.uk/monetarypolicy/Pages/framework/framework.aspx |url-status=live |archive-url=https://web.archive.org/web/20161104091923/http://www.bankofengland.co.uk/monetarypolicy/Pages/framework/framework.aspx |archive-date=4 November 2016 |access-date=31 October 2016 |publisher=Bank of England}}</ref>

Independent central banks that adopt an inflation target are known as [[Milton Friedman|Friedmanite]] central banks. This change in Labour's politics was described by [[Robert Skidelsky|Skidelsky]] in ''The Return of the Master''<ref>{{Cite book |url=https://books.google.com/books?isbn=1610390032 |title=The Return of the Master |date=2009 |publisher=Public Affairs |isbn=978-1610390033 |access-date=19 August 2016}}</ref> as a mistake and as an adoption of the [[Rational expectations|rational expectations hypothesis]] as promulgated by [[Alan Walters]].<ref>{{Cite journal |last=Walters |first=A. A. |date=June 1971 |title=Consistent expectations, distributed lags and the quantity theory |journal=[[The Economic Journal]] |volume=81 |issue=322 |pages=273–281 |doi=10.2307/2230071 |jstor=2230071}}</ref> Inflation targets combined with central bank independence have been characterised as a "starve the beast" strategy creating a lack of money in the public sector.{{Citation needed|date=December 2022}}

in June 1998 responsibility for the regulation and supervision of the banking and insurance industries was transferred from the bank to the [[Financial Services Authority]]. A [[memorandum of understanding]] described the terms under which the bank, the Treasury, and the FSA would work toward the common aim of increased financial stability.<ref>{{Cite web |title=Memorandum of Understanding between the HM Treasury, the Bank of England and the Financial Services Authority |url=http://www.bankofengland.co.uk/financialstability/mou.pdf |url-status=dead |archive-url=https://web.archive.org/web/20101203101708/http://www.bankofengland.co.uk/financialstability/mou.pdf |archive-date=3 December 2010 |access-date=10 May 2010 |df=dmy}}</ref> (Ten years later, however, after the [[2008 financial crisis]], new banking legislation transferred the responsibility for regulation and supervision of the banking and insurance industries back to the Bank of England).