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Home > News and Publications > Summary of Quarterly Bulletin 2008 Q4

Summary of Quarterly Bulletin 2008 Q4

15 December 2008


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 (2.8mb).

Recent economic and financial developments
Markets and operations (1.5mb)
This article reviews developments in global financial markets since the 2008 Q3 Quarterly Bulletin up to late November 2008. The article also reviews the Bank's official operations during this period.

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.

The financial position of British households:  evidence from the 2008 NMG Research survey (522k)
By Tomas Hellebrandt and Garry Young of the Bank's Monetary Assessment and Strategy Division and Matt Waldron of the Bank's Structural Economic Analysis Division.
The financial position of British households has been affected by a number of developments over the past year, including sharp fluctuations in food and energy bills, falling house prices and tighter credit conditions. Evidence from the latest survey of households, carried out for the Bank by NMG Research in late September and early October, shows how these and other changes have impacted on household budgets and spending decisions. The typical household reported that the income it had available after meeting household bills had fallen over the past year and that it had saved less than it had expected. Some households had been put off spending by tighter credit conditions, and more households were finding their debts to be a burden than in similar surveys carried out since the mid-1990s. But despite the greater pressures on household finances, only 3% of the households surveyed had so far fallen behind on bill or debt payments. Lower house prices had reduced the housing equity of homeowners.
The raw survey data are available in Excel format (4.7mb)

Understanding dwellings investment (736k)
By Matthew Corder of the Bank's Structural Economic Analysis Division and Nyssa Roberts of the Bank's Conjunctural Assessment and Projections Division.
Dwellings investment (house building and home improvements) can have a large impact on GDP growth. This article presents an economic framework that helps explain movements in UK dwellings investment. House building responded sluggishly to rising house prices in the earlier part of this decade. This partly reflected lags in the construction cycle, but also increasing costs arising from the planning process. Such factors are less likely to restrain a downward adjustment in house building, and since late 2007 house builders have cut production sharply in response to lower house prices and housing market activity.

Price-setting behaviour in the United Kingdom (520k)
By Jennifer Greenslade and Miles Parker of the Bank's Structural Economic Analysis Division.
It is important for central banks to understand how companies set prices, since price-setting behaviour plays a key role in the monetary policy transmission mechanism. Surveys of companies have been conducted in a variety of countries to shed light on this issue. Earlier this year the Bank of England asked companies who are contacts of the Bank's Agents about how they set prices. The survey adds to and updates our understanding. It indicates that the frequency with which companies change their prices varies considerably across sectors but that over the past decade a significant number have increased the frequency of price changes. Different factors influence price rises and falls but nearly half of companies change their prices within three months of an increase in costs or a fall in demand.

Monetary Policy Roundtable (224k)
On 30 September, the Bank of England and the Centre for Economic Policy Research jointly hosted a Monetary Policy Roundtable. This was the first in what is expected to become a regular series intended to provide a forum for economists to discuss key issues affecting the design and operation of monetary policy in the United Kingdom. There were four discussion topics: the prospects for the housing market and consumer spending; oil and other global price pressures; monetary policy considerations at the current juncture; and lessons from the financial turmoil for monetary policy. This report summarises the main points made by participants at the Roundtable.

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