Glossary

Bank of England

The UK’s ‘central bank’. It issues bank notes, is the government’s banker and is the banker to the banks. The Bank sets ‘official’ interest rates for the UK and has a general responsibility for the financial stability in the economy.

broker

A person who organises a financial transaction (like a mortgage) on your behalf. Brokers are also referred to as ‘intermediaries’ as they operate between (and bring together) the public and financial institutions. Brokers charge a fee for their services.

Financial Conduct Authority (FCA)

 The organisation that regulates the financial services industry and the sale of financial products to the public.

monetary policy

The use of interest rates and controls on the supply of money to help achieve the key objectives for the management of the economy – principally the control of inflation and the level of economic activity.

price inflation

A general rise in price levels within an economy.

secured debt

Borrowing that is contractually linked to the asset you buy with the money like a house or car. If you fail keep up with repayments you risk the asset being repossessed (taken to cover your debt) by the lender.

trillion

A thousand billion (a billion is a thousand million).

unsecured debt

Borrowing that is not contractually linked to the assets you buy with the money. If you fail to keep up with your repayments the lender will still have the right to take legal action against you to try to get back the money owing to them.