This report provides a comprehensive overview of monetary policy, focusing on its application and impact within the United Kingdom. It begins by defining monetary policy and its significance, emphasizing the role of the central bank in managing the money supply to stabilize the economy. The report then delves into the functions of the Monetary Policy Committee (MPC) of the Bank of England, detailing its responsibility for setting interest rates and implementing monetary measures to maintain the inflation target of 2%. It examines the tools employed by the MPC, such as the bank rate, and how these tools influence consumer spending, asset prices, and exchange rates. Furthermore, the report explores the factors influencing the MPC's decisions, including fluctuations in the global market, stock market turbulence, slow economic growth, and fluctuating oil prices. The report also addresses policy conflicts that can arise, such as those between full employment and low inflation or economic growth and balance of payments. The conclusion suggests that the MPC is likely to maintain the current base rate due to these complex economic conditions.