Bank of England

Basic Bank of England Info

The central bank of the United Kingdom is sometimes referred to as the "Old Lady of Threadneedle Street," a name that's been derived from some ghostly local folklore, but its official name in the financial world is the Bank of England.

Founded in 1694, nationalized on March 1, 1946, and made independent in 1997, the Bank of England is the hub of the UK financial system, and hence, a pivotal institution in forex trading.

In its role as both a consumer and government bank, the "Old Lady's" policies often have far-reaching effects for the worldwide financial market and for Forex trading in particular.

Since 1998, the Bank of England has been headed by a committee composed of the bank's governor, two deputy governors, and sixteen non-executive directors. Small-scale account holders and larger corporate account holders are generally represented in equal numbers in the client base.

Importance to FX trading

Along with promoting and maintaining financial stability in the country's economy, the Bank of England is in charge of managing the Exchange Equalisation Account (EEA). Founded in 1992, the EEA is responsible for influencing the exchange rate for the gold reserves held by the UK.

The EEA also keeps foreign currencies and gold for trading purposes. Forex brokers and traders who deal in GBP will want to pay close attention to announcements and policy changes coming from the Bank of England.

Policies, procedures and projections of the stability of the British pound from the Bank of England can serve as indicators of actual fluctuation of the GBP

Related Forex Trading Indicators

The actions of various nations’ central banks will usually serve as an important forex trading indicator. A forex broker or trader interested in trading GBP will likely also want to pay attention to FX trading indicators from other central banks world-wide, including the European Central Bank or the Reserve Bank of Australia.

Head back to our main resources page for more basic FX trading information.