The UK recession in context — what do three centuries of data tell us? (178k)
By Sally Hills and Ryland Thomas, and Nicholas Dimsdale of The Queen's College, Oxford.
The Quarterly Bulletin has a long tradition of using historical data to help analyse the latest developments in the UK economy. To mark the Bulletin's 50th anniversary, this article places the recent UK recession in a long-run historical context. It draws on the extensive literature on UK economic history and analyses a wide range of macroeconomic and financial data going back to the 18th century. The UK economy has undergone major structural change over this period but such historical comparisons can provide lessons for the current economic situation.
The data annex is available in Excel format (575k).
By Charlotta Groth and Peter Westaway.
This article provides a brief review of issues relating to deflation. It explains what is meant by deflation, examines the historical experience and investigates what costs might be associated with deflationary episodes. It suggests that the adverse effects of deflation can be exaggerated by confusing the effects of the underlying shock with the effects of deflation per se. The costs of deflation itself are most likely to be associated with debt deflation and downward rigidities in money wages. By learning from previous episodes, it argues that deflationary episodes can be short-lived and less costly if policy responds promptly and decisively, employing the full range of conventional and unconventional monetary policy instruments.
Public attitudes to inflation and interest rates (773k)
By Ronnie Driver and Richard Windram.
Since 2001, the Bank of England has published an annual article discussing the results from the survey of public attitudes to inflation carried out by GfK NOP on behalf of the Bank. This article analyses the results of surveys up to February 2007. Given the relevance of inflation expectations to the current inflation outlook, this year's article focuses on the pickup in the general public's inflation expectations between 2005 and 2006, and the factors that may have contributed to that rise. It also considers the interactions with the public's attitudes to interest rates. Responses to other questions in the survey are discussed in the annex.
Long-run evidence on money growth and inflation (675k)
By Luca Benati
We investigate the correlation between inflation and the rates of growth of narrow and broad money in the United Kingdom since the 19th century. Empirical evidence points towards a remarkable stability across monetary regimes in the correlation for longer-run trends in the data, but some instability in the short to medium term. Additional evidence from the United States confirms the overall stability of the correlation for the longer-run trends.
The inflation-targeting framework from an historical perspective (583k)
By Luca Benati
This article provides an historical perspective on the post-1992 inflation-targeting regime in the United Kingdom. It assesses nearly 400 years of UK economic history. The main findings are that the inflation-targeting regime has been characterised by the most stable macroeconomic environment in recorded UK history. There has been a significant improvement in the stability of the Phillips inflation-unemployment correlation during the post-1992 period. And inflation persistence in the United Kingdom has been the exception, not the rule.
has inflation been so low since 1999?
Speech by Stephen Nickell, presented at a meeting of the Bank
of England regional Agents
This paper explains why CPI goods prices have been falling in
the United Kingdom since mid-1999. From 1999 to early 2001,
the main factor was a squeeze on margins in the distribution
sector. Since then, falling import prices have played a key
role along with strong distribution sector productivity growth.
expectations of UK inflation
By Clare Lombardelli and Jumana Saleheen
This article illustrates how inflation expectations of the general
public vary according to individuals' different circumstances,
and tries to explain how these differences might occur.
do measures of core inflation really tell us?
By Alan Mankikar and Jo Paisley
Offers an overview of some of the issues. It examines how core
inflation has been defined, sets out to what extent the concept
might be useful for policy-makers and assesses the wide range
of available measures in the United Kingdom.
attitudes about inflation: a comparative analysis
By Kenneth Scheve
Analyses public opinion in advanced economies to assess what
individuals think about inflation. Finds significant variation
across countries and over time.
views of macroeconomics
Speech by Sir Alan Budd
In this speech, Sir Alan Budd reviews the changing approaches
to macroeconomic policy shown by three Budgets that occurred
at similar stages in the economic cycle. He concludes that this
analysis provides an illustration based on experience of the
need for robust policy rules.
to the UK monetary policy framework and financial services regulation
Speech by the Governor at the Lord Mayor's Dinner for Bankers
and Merchants of the City of London
Welcomes the Chancellor's decision to give the Bank operational
responsibility for delivering price stability as defined by
the Government's inflation target. Also discusses reform of
financial services regulation.
costs of inflation
By Clive Briault
Surveys the academic literature on the costs of inflation. Also
briefly reviews the emerging literature on the costs of reducing
inflation, which suggests that the short-term trade-off between
unemployment and inflation is more pronounced in countries with
prospects for monetary stability
Speech by the Governor at the Lord Mayor's banquet
Argues that the current monetary policy framework provides the
best chance in 30 years of achieving price stability in the
over 300 years
By Helen MacFarlane and Paul Mortimer-Lee
How has thinking on inflation developed over past 300 years?
And how has Bank withstood inflationary 'ravages of time'?