– What does the Bank of England do with the money they get from charging interest?

Question

I understand (or think I do) that they increase/decrease interest rates to try and control inflation, but what do they actually do with the money they get? It’s just increased, so what will they do with their now increased income?

In: 0

Answer 1

They are a central bank. Just like money coming from thin air when they give out loans, everything paid back to them just ceases to exist.