What are two main roles of the Bank of England?

The choice highlighting monetary policy and ensuring financial stability correctly identifies two of the primary functions of the Bank of England.

The Bank of England is responsible for setting monetary policy in the UK, primarily through the manipulation of interest rates to achieve its inflation target and influence economic activity. By adjusting rates, it aims to control inflation and stabilize the economy.

Additionally, the Bank of England plays a crucial role in ensuring financial stability. It monitors and assesses risks to the financial system and has the authority to take action to mitigate those risks, supporting the overall health of the economy and preventing financial crises. This involves oversight of banks and other financial entities, ensuring they operate in a safe and sound manner.

Other options are less representative of the core functions of the Bank. While managing foreign exchange might be a peripheral function of central banks, it does not encompass the main aspects seen in the selected answer. Supervising commercial banks is part of its role, but it is more closely tied to the overarching goal of stability rather than just mere supervision. Managing state debt and funding construction projects do not align with the primary objectives of the Bank of England, as its focus is on macroeconomic stability and monetary regulation rather than specific project funding or direct involvement in state debt management outside of its