The Bank of England Monetary and financial stability

The Bank of England Monetary and financial stability The Bank of England is the central bank of the United Kingdom. Sometimes known as the Old Lady of Threadneedle Street, the Bank was founded in 1694, nationalised on 1 March 1946, and gained independence in 1997. Standing at the centre of the UKs financial system, the Bank is committed to promoting and maintaining monetary and financial stability as its contribution to a healthy economy. The Bank of England exists to ensure monetary stability and to contribute to financial stability. The Bank of England has been issuing banknotes for over 300 years. During that time, both the notes themselves and their role in society have undergone continual change. From todays perspective, it is easy to accept that a piece of paper that costs a few pence to produce is worth five, ten, twenty or fifty pounds. Gaining and maintaining public confidence in the currency is a key role of the Bank of England and one which is essential to the proper functioning of the economy. Core Purpose 1 Monetary Stability Monetary stability means stable prices and confidence in the currency. Stable prices are defined by the Governments inflation target, which the Bank seeks to meet through the decisions delegated to the Monetary Policy Committee, explaining those decisions transparently and implementing them effectively in the money markets. The first objective of any central bank is to safeguard the value of the currency in terms of what it will purchase at home and in terms of other currencies. Monetary policy is directed to achieving this objective and to providing a framework for non-inflationary economic growth. As in most other developed countries, monetary policy operates in the UK mainly through influencing the price at which money is lent, in other words the interest rate. The Banks price stability objective is made explicit in the present monetary policy framework. It has two main elements: an annual inflation target set each year by the Government and a commitment to an open and accountable policy-making regime. Setting monetary policy deciding on the level of short-term interest rates necessary to meet the Governments inflation target is the responsibility of the Bank. In May 1997 the Government gave the Bank operational independence to set monetary policy by deciding the short-term level of interest rates to meet the Governments stated inflation target currently 2%. Core Purpose 2 Financial Stability Financial stability entails detecting and reducing threats to the financial system as a whole. Such threats are detected through the Banks surveillance and market intelligence functions. They are reduced by strengthening infrastructure, and by financial and other operations, at home and abroad, including, in exceptional circumstances, by acting as the lender of last resort. One of the Bank of Englands two core purposes is monetary stability. Monetary stability means stable prices low inflation and confidence in the currency. Stable prices are defined by the Governments inflation target, which the Bank seeks to meet through the decisions taken by the Monetary Policy Committee. A principal objective of any central bank is to safeguard the value of the currency in terms of what it will purchase. Rising prices inflation reduces the value of money. Monetary policy is directed to achieving this objective and providing a framework for non-inflationary economic growth. As in most other developed countries, monetary policy usually operates in the UK through influencing the price at which money is lent the interest rate. However, in March 2009 the Banks Monetary Policy Committee announced that in addition to setting Bank Rate, it would start to inject money directly into the economy by purchasing assets often known as quantitative easing. This means that the instrument of monetary policy shifts towards the quantity of money provided rather than its price. Low inflation is not an end in itself. It is however an important factor in helping to encourage long-term stability in the economy. Price stability is a precondition for achieving a wider economic goal of sustainable growth and employment. High inflation can be damaging to the functioning of the economy. Low inflation can help to foster sustainable long-term economic growth. Monetary Policy Framework The Banks monetary policy objective is to deliver price stability low inflation and, subject to that, to support the Governments economic objectives including those for growth and employment. Price stability is defined by the Governments inflation target of 2%. The remit recognises the role of price stability in achieving economic stability more generally, and in providing the right conditions for sustainable growth in output and employment. The Governments inflation target is announced each year by the Chancellor of the Exchequer in the annual Budget statement. The 1998 Bank of England Act made the Bank independent to set interest rates. The Bank is accountable to parliament and the wider public. The legislation provides that if, in extreme circumstances, the national interest demands it, the Government has the power to give instructions to the Bank on interest rates for a limited period. The inflation target The inflation target of 2% is expressed in terms of an annual rate of inflation based on the Consumer Prices Index (CPI). The remit is not to achieve the lowest possible inflation rate. Inflation below the target of 2% is judged to be just as bad as inflation above the target. The inflation target is therefore symmetrical. If the target is missed by more than 1 percentage point on either side i.e. if the annual rate of CPI inflation is more than 3% or less than 1% the Governor of the Bank must write an open letter to the Chancellor explaining the reasons why inflation has increased or fallen to such an extent and what the Bank proposes to do to ensure inflation comes back to the target. A target of 2% does not mean that inflation will be held at this rate constantly. That would be neither possible nor desirable. Interest rates would be changing all the time, and by large amounts, causing unnecessary uncertainty and volatility in the economy. Even then it would not be possible to keep inflation at 2% in each and every month. Instead, the MPCs aim is to set interest rates so that inflation can be brought back to target within a reasonable time period without creating undue instability in the economy. The Monetary Policy Committee The Bank seeks to meet the inflation target by setting an interest rate. The level of interest rates is decided by a special committee the Monetary Policy Committee. The MPC consists of nine members five from the Bank of England and four external members appointed by the Chancellor. It is chaired by the Governor of the Bank of England. The MPC meets monthly for a two-day meeting, usually on the Wednesday and Thursday after the first Monday of each month. Decisions are made by a vote of the Committee on a one-person one-vote basis. Communications The interest rate decision is announced at 12 noon on the second day. The minutes of the meetings, including a record of the vote, are published on the Wednesday of the second week after the meeting takes place. Each quarter, the Bank publishes its Inflation Report, which provides a detailed analysis of economic conditions and the prospects for economic growth and inflation agreed by the MPC. The Bank also publishes other material to increase awareness and understanding of its monetary policy function. Monetary Policy Committee (MPC) Interest rates are set by the Banks Monetary Policy Committee. The MPC sets an interest rate it judges will enable the inflation target to be met. The Banks Monetary Policy Committee (MPC) is made up of nine members the Governor, the two Deputy Governors, the Banks Chief Economist, the Executive Director for Markets and four external members appointed directly by the Chancellor. The appointment of external members is designed to ensure that the MPC benefits from thinking and expertise in addition to that gained inside the Bank of England How Monetary Policy Works From interest rates to inflation When the Bank of England changes the official interest rate it is attempting to influence the overall level of expenditure in the economy. When the amount of money spent grows more quickly than the volume of output produced, inflation is the result. In this way, changes in interest rates are used to control inflation. The Bank of England sets an interest rate at which it lends to financial institutions. This interest rate then affects the whole range of interest rates set by commercial banks, building societies and other institutions for their own savers and borrowers. It also tends to affect the price of financial assets, such as bonds and shares, and the exchange rate, which affect consumer and business demand in a variety of ways. Lowering or raising interest rates affects spending in the economy. A reduction in interest rates makes saving less attractive and borrowing more attractive, which stimulates spending. Lower interest rates can affect consumers and firms cash-flow a fall in interest rates reduces the income from savings and the interest payments due on loans. Borrowers tend to spend more of any extra money they have than lenders, so the net effect of lower interest rates through this cash-flow channel is to encourage higher spending in aggregate. The opposite occurs when interest rates are increased. Lower interest rates can boost the prices of assets such as shares and houses. Higher house prices enable existing home owners to extend their mortgages in order to finance higher consumption. Higher share prices raise households wealth and can increase their willingness to spend. Changes in interest rates can also affect the exchange rate. An unexpected rise in the rate of interest in the UK relative to overseas would give investors a higher return on UK assets relative to their foreign-currency equivalents, tending to make sterling assets more attractive. That should raise the value of sterling, reduce the price of imports, and reduce demand for UK goods and services abroad. However, the impact of interest rates on the exchange rate is, unfortunately, seldom that predictable. Changes in spending feed through into output and, in turn, into employment. That can affect wage costs by changing the relative balance of demand and supply for workers. But it also influences wage bargainers expectations of inflation an important consideration for the eventual settlement. The impact on output and wages feeds through to producers costs and prices, and eventually consumer prices. Some of these influences can work more quickly than others. And the overall effect of monetary policy will be more rapid if it is credible. But, in general, there are time lags before changes in interest rates affect spending and saving decisions, and longer still before they affect consumer prices. We cannot be precise about the size or timing of all these channels. But the maximum effect on output is estimated to take up to about one year. And the maximum impact of a change in interest rates on consumer price inflation takes up to about two years. So interest rates have to be set based on judgments about what inflation might be the outlook over the coming few years not what it is today. Setting interest rates As banker to the Government and the banks, the Bank is able to forecast fairly accurately the pattern of money flows between the Governments accounts on one hand and the commercial banks on the other, and acts on a daily basis to smooth out the imbalances which arise. When more money flows from the banks to the Government than vice versa, the banks holdings of liquid assets are run down and the money market finds itself short of funds. When more money flows the other way, the market can be in cash surplus. In practice the pattern of Government and Bank operations usually results in a shortage of cash in the market each day. The Bank supplies the cash which the banking system as a whole needs to achieve balance by the end of each settlement day. Because the Bank is the final provider of cash to the system it can choose the interest rate at which it will provide these funds each day. The interest rate at which the Bank supplies these funds is quickly passed throughout the financial system, influencing interest rates for the whole economy. When the Bank changes its dealing rate, the commercial banks change their own base rates from which deposit and lending rates are calculated. Quantitative Easing In March 2009, the Monetary Policy Committee announced that, in addition to setting Bank Rate at 0.5%, it would start to inject money directly into the economy in order to meet the inflation target. The instrument of monetary policy shifted towards the quantity of money provided rather than its price (Bank Rate). But the objective of policy is unchanged to meet the inflation target of 2 per cent on the CPI measure of consumer prices. Influencing the quantity of money directly is essentially a different means of reaching the same end. Read more Significant reductions in Bank Rate have provided a large stimulus to the economy but as Bank Rate approaches zero, further reductions are likely to be less effective in terms of the impact on market interest rates, demand and inflation. And interest rates cannot be less than zero. The MPC therefore needs to provide further stimulus to support demand in the wider economy. If spending on goods and services is too low, inflation will fall below its target. The MPC boosts the supply of money by purchasing assets like Government and corporate bonds a policy often known as Quantitative Easing. Instead of lowering Bank Rate to increase the amount of money in the economy, the Bank supplies extra money directly. This does not involve printing more banknotes. Instead the Bank pays for these assets by creating money electronically and crediting the accounts of the companies it bought the assets from. This extra money supports more spending in the economy to bring future inflation back to the target

Belief Systems: Personality Effects

There are many ways in which belief systems affect the personality of individuals, however, the most overarching and poignant way is the ability or lack of ability of a person to gravitate towards hope and figuring out personal solutions. Unfortunately, there are many people who believe that they are not able to make positive changes in their lives, and these individuals become stuck in cycles of maladaptive thoughts and behaviors (Metcalf & O'Hanlon, 2008). They believe that there are no solutions or actions which can be taken personally to help remedy and positively alter their own lives.In these types of situations, people can become prone to destructive thoughts and behaviors which impede their own life functioning and sometimes also the lives of people in their environment. Destructive behaviors which are linked to negative thinking are physical, observable signs that people’s belief systems are faithless and contributing to their own demise. Some people may demonstrate a signal to others that they possess the lack of believing in the value of self control when they decide to discipline their children through spanking, an antisocial and abusive behavior.Another example of damaging thought is the belief that men do not need to support women through childbirth and raising children, contributing to male narcissism and also to woman and child deprivation of care and finances (Sklare, 2004). It makes sense for people who are stuck in cycles of harm and abuse to help to pull themselves out and to heal their harmful personalities by positively changing the ways in which they think and act. There are many ways in which people’s negative thinking in regard to formulating their belief systems disrupts the relationship of self with self and the relationship of self with others.It is important for people to find hope in their everyday thoughts and actions which lends to the bettering of their own lives and the lives of people in their environment. Life a nd development is only positive, its opposite being death and destruction, and focusing on the paths to workable solutions is the best way for people’s beliefs to contribute to their surviving and thriving, to their characters, even under difficult circumstances. References Metcalf, L. & O'Hanlon, B. (2008). Counseling Toward Solutions. John Wiley and Sons. Sklare, G. (2004). Brief Counseling That Works. Corwin Pre

How to Earn Computer Certifications Online

Whether you’re looking to broaden the number of companies you can apply to, or simply would like to learn a new skill, there are many options for technology certification and training online. While most credible certification processes require you to take the exam at an authorized testing location, almost all of them do permit you to do all training and preparation work via the internet.When seeking certification, keep in mind that not all types of certification require applicants to complete online training programs. In many cases, certification can be awarded simply by passing an exam. Most certification providers provide training and test prep, but they often charge additional fees to access it. It’s generally best to check the provider’s website for information on the certification first to get a good feel for what preparation is required and what you’ll need help with. Once you decide that the certification is right for you, note the cost to take the exam, and whether the certification provider offers any online assistance free of charge. Fortunately, there are some excellent resources for preparing for certification online that are available free of charge.Some of the more common certification types include: CompTIA A, Microsoft Certified Systems Engineer (MCSE), Cisco Certification (CCNA CCNP), Microsoft Office Specialist (MOS), and the Certified Novell Engineer (CNE). CompTIA A Certification Employers often ask that those looking for IT type position carry some form of certification. For those looking to work with computer hardware, one of the most common certification sought is Comptia A. The A certification demonstrates that you possess the basic foundation of knowledge necessary to provide IT support and is often considered a good jumping off point for those looking to have a career working with computers. Information on the exam and links to online preparation options are available at Comptia.org. Free test prep can be obtained from ProfessorMesser.com. Microsoft Certified System Engineer The MCSE is a good certification to get if you’re looking for employment with a business that uses Microsoft networked systems. It’s good for those with a year or two of experience with networks and some familiarity with Windows systems. Information on the certification,  as well  as testing locations, is provided at the Microsoft website. Free preparation for the exam as well as training material can be found at mcmcse.com. Cisco Certification Cisco certification, particularly the CCNA, is highly valued by employers with large networks. Those looking for a career working with computer networks, network security, and internet service providers will be well served by Cisco certification. Information on certification can be found at Cisco.com. Free study guides and tools can be found at Semsim.com. Microsoft Office Specialist Certification Those looking to work with Microsoft office products such as Excel or PowerPoint will be well served with an MOS certification. While not often specifically requested by employers, an MOS certification is a strong way of demonstrating ones aptitude with a specific Microsoft application. They are also less intense to prepare for than some of the other common certifications. Information from Microsoft on this is available. Free test preparation can be difficult to find, but some practice tests are available for free at Techulator.com. Certified Novell Engineer The CNE is ideal for those looking to, or currently working with Novell software such as Netware. As Novell products seem less used today than they once were, this certification is probably ideal only if you already plan to work with Novell networks. Information on the certification can be found at Novell.com. A directory of free preparation materials can be found at Certification-Crazy.net.Whatever certification you choose to pursue, be sure to review the preparation requirements and costs. Some of the most difficult certification types can take many months to prepare for, so be sure that you’re able to invest the time and resources necessary to get certified. If your virtual certification efforts go well, you may also be interested in earning an online degree.

The Role Of Women During The Renaissance And Enlightenment

Throughout the history of Europe, the role of women has drastically been altered. The Middle Ages saw peasant women working side by side with their husbands and taking care of their children at home. As time passed by, women were given an increased amount of rights, and then the cottage industry took over, providing thousands of women the opportunity to work as in the comfort of their home. The eruption of the agricultural revolution and technological advance soon swept England and the continent, further increasing opportunities. Work was now done in factories, which started off as family units for convenience, but soon split off because of increasing urbanization and industrialization. The 19th century saw such alterations, and the role of a woman came under investigation as mothers were unable to perform their necessary house duties and take care of the children, because of the need to work. As the role of women changed within the Renaissance and Enlightenment, it would also adapt to the new urban, industrial landscape. Although monetarily these changes proved to be favorable, the social developments brought by the Industrial revolution separated the family, led to more dangerous work both physically and mentally, and also stood as a challenge to femininity, all to the extent of changing everyday life. As the birth of industrialization and urbanization took place, it greatly affected the everyday lives of working-class women. In the beginning, as factories lacked aShow MoreRelatedComparing The Tang Dynasty And The Western Civilization1524 Words   |  7 Pagescould go, nearly who and what a person was depended on their gender. Women were seen as inferior to men no matter their intellectual or social status background. Men and women alike were expected to have certain and specific duties associated with their gender. 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