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Home > News and Publications > Summary of Quarterly Bulletin 2012 Q1

Summary of Quarterly Bulletin 2012 Q1

Contents of Quarterly Bulletin 2012 Q1

​Each article is available as a separate pdf file;  click on the appropriate title to access the relevant file.  Alternatively you may download the complete issue.

Complete issue (770k)

Recent economic and financial developments
Markets and operations (229k)
This article reviews developments in sterling financial markets, including the Bank’s official operations, between the 2011 Q4 Quarterly Bulletin and 9 March 2012.  The article also summarises market intelligence on selected topical issues relating to market functioning, including the most recent results from the Money Market Liaison Group survey of the sterling money market and developments in the market for unsecured floating-rate notes.

Research and analysis
Research work published by the Bank is intended to contribute to debate, and does not necessarily reflect the views of the Bank or of MPC members.

What might be driving the need to rebalance in the United Kingdom? (110K)
By Stuart Berry, Matthew Corder and Richard Williams of the Bank’s Monetary Analysis Directorate.
Low national saving, a persistent current account deficit and the rapid expansion of balance sheets are potential reasons why the UK economy needs to rebalance.  Global factors are likely to have been an important driver of these developments, but domestic factors have played an important role in the longer-term trends.  This article looks at how the potential drivers of the need for rebalancing have evolved and how they fit together.

Agents’ Special Surveys since the start of the financial crisis (70K)
By Thomas Belsham of the Bank’s Inflation Report and Bulletin Division, Simon Caunt of the Bank’s Agency for the North West and Iain Duff of the Bank’s Agency for Scotland.
This article looks at the Agents’ Special Surveys that have been commissioned by the Bank of England’s Monetary Policy Committee (MPC) since the start of the financial crisis.  Through the prism of the Special Surveys, the article discusses some key features of the recession and the puzzles faced by policymakers.  And it describes how the Special Surveys have been used by the MPC to try to shed light on these issues — some of which continue to be a significant source of uncertainty today.

What can the oil futures curve tell us about the outlook for oil prices? (107k)
By Dan Nixon of the Bank’s International Economic Analysis Division and Tom Smith of the Bank’s Macro Financial Analysis Division.
Large movements in the oil price have had significant effects on UK CPI inflation over the past few years.  In order to produce an inflation forecast, it is necessary to assume a path for oil and other commodity prices.  The Monetary Policy Committee assumes that oil prices follow the path given by market futures prices when deciding their central projections for CPI inflation and GDP growth.  This article considers arguments for and against using the futures curve as an assumed path and describes some of the other indicators used by the Committee in assessing the outlook for oil prices.

Quantitative easing and other unconventional monetary policies:  Bank of England conference summary (94k)
By Michael Joyce of the Bank’s Macro Financial Analysis Division.
In November 2011, the Bank of England held a conference to discuss the lessons learned about quantitative easing and the other unconventional monetary policies used during the global financial crisis.  A number of central bank economists and academics presented their research.  This article summarises the presentations made at the conference and some of the related discussions.  Overall, the research presented broadly supported the emerging consensus that unconventional monetary policies helped to mitigate the macroeconomic effects of the crisis.  But there was less agreement about the magnitude of the effects and the main mechanisms through which the policies may have worked, and a number of areas for further research were suggested.
The Bank of England’s Special Liquidity Scheme (89k)
By Sarah John, Matt Roberts and Olaf Weeken of the Bank’s Sterling Markets Division.
The Bank of England introduced the Special Liquidity Scheme (SLS) in April 2008 to improve the liquidity position of the UK banking system.  It did so by helping banks finance assets that had got stuck on their balance sheets following the closure of some asset-backed securities markets from 2007 onwards.  The Scheme was, from the outset, intended as a temporary measure, to give banks time to strengthen their balance sheets and diversify their funding sources.  The last of the SLS transactions expired in January 2012, at which point the SLS terminated.  During the period in which the SLS was in operation, the Bank undertook a fundamental review of its framework for sterling market operations and developed a new set of facilities to provide ongoing liquidity insurance to the banking system.  This article explains the design and operation of the SLS and describes how that experience has influenced the design of the Bank’s permanent liquidity insurance facilities.
Monetary Policy Roundtable (35k)
On 15 December 2011, the Bank of England and the Centre for Economic Policy Research hosted the seventh Monetary Policy Roundtable.  These events are intended to provide a forum for economists to discuss key issues affecting the design and operation of monetary policy in the United Kingdom.  As always, participants included a range of economists from private sector financial institutions, academia and public sector bodies.  At this seventh Roundtable there were two discussion topics:  what are the key headwinds facing the UK economy?;  and how effective is the further round of asset purchases likely to be?
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