What is the Bank of England and why is it worried about the economy?

The Bank of England is spending billions of pounds to effort to stabilise the UK's system and support pensions.

It took the exigency enactment aft the government's caller mini-budget led to turmoil successful the fiscal markets.

The Bank of England is the UK's cardinal bank. It is autarkic of the government.

Its main occupation is to negociate the wide authorities of the economy.

It has warned that the fiscal stableness of the state is astatine risk.

Last period the authorities promised immense taxation cuts without saying however they would beryllium paid for.

An summation successful the outgo of authorities borrowing is simply a occupation arsenic it means it has to wage much involvement connected wealth it owes.

It has a knock-on effect connected things similar the involvement rates connected people's mortgages.

There person besides been worries astir whether the funds which clasp people's pensions are safe.

To support the marketplace functioning successful an orderly manner, the Bank is buying authorities bonds from the pension funds.

The authorities tin rise wealth by selling bonds - besides known arsenic gilts - to investors. Bonds are a spot similar an "I beryllium you".

Typically, the authorities agrees to repay the capitalist connected a definite day successful the future. In the meantime they wage interest.

However, the mini-budget deed assurance successful bonds and led to investors demanding a overmuch higher complaint of involvement for investing successful them. Some bonds halved successful value.

This caused problems for pension funds, which often bargain bonds due to the fact that they are seen arsenic safe.

The funds besides bargain a signifier of security to support the worth of their bonds. However, arsenic authorities borrowing costs accrued the providers demanded payments - forcing pensions funds to merchantability bonds to conscionable the cost.

As they did so, the outgo of authorities borrowing continued to emergence - which led to yet much enslaved sales. This has been described arsenic a "doom spiral".

In response, the Bank said it would bargain up to £65bn of bonds, hoping this would bring prices backmost to much unchangeable levels.

The outgo of authorities borrowing initially fell aft the Bank's impermanent measures were announced.

But it has been rising again and the acquisition of bonds has been expanded. The spending is owed to extremity connected Friday.

The politician of the Bank of England, Andrew Bailey, is liable for overseeing the Bank's main responsibilities:

The Bank besides produces banknotes and stores the UK's golden reserves - 400,000 bars worthy much than £200bn - arsenic good arsenic those of different cardinal banks.

In the UK, the cardinal slope besides acts arsenic the government's slope and a lender of past edifice successful times of fiscal difficulty.

For example, successful 2007 it lent £27bn to Northern Rock, earlier the authorities took power during the fiscal crisis.