Can the Bank of England Influence GDP?
Yes. With BOE having substantial influence, if not authoritative, in money supply and operations of banks, it can undoubtedly influence GDP. Since money supply is tagged with a lot of economic variables such as interest rates, inflation, exchange rate and international trade, monetary policy held by BOE has its way to use this related variables that will result to a determined economic environment. The more active the economy (economic boom), the more money supply is required to finance its operations. This supply will be used to buy raw materials and other factors of production. In effect, the amount of GDP the economy can produce depends on the availability of money the economy can provide to businesses. This statement makes banks crucial as BOE dummies in aiding the government to obtain its economic targets including the level of GDP. As the intermediary of available money, banks are the primary source of financing/ augmenting of operations in the business sector. When it is forced
