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Home > News and Publications > Summary of Quarterly Bulletin 2009 Q4

Summary of Quarterly Bulletin 2009 Q4

14 December 2009


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 (2.3mb).

Recent economic and financial developments
Markets and operations (1.2mb)
This article reviews developments in sterling financial markets since the 2009 Q3 Quarterly Bulletin up to end-November 2009. The article also reviews the Bank's official operations.

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 2009 NMG survey
By Tomas Hellebrandt and Silvia Pezzini of the Bank's Monetary Assessment and Strategy Division and Jumana Saleheen and Richard Williams of the Bank's Structural Economic Analysis Division.
The severe recession of the past year might be expected to have put the financial position of British households under considerable strain. Unemployment has risen significantly, credit conditions have tightened and many homeowners have seen their housing equity eroded. But many borrowers have also benefited significantly from the effects of lower mortgage interest rates. Evidence from the latest survey of households, carried out for the Bank by NMG Financial Services Consulting in late September and early October, shows how these and other changes impacted on households' budgets and their decisions on whether to spend or save. Despite the weak economic backdrop, a slightly smaller proportion of households reported problems repaying their debts than in the 2008 survey. Partly this was because around half of mortgagors had benefited from lower interest rates. Around a quarter of households had increased or planned to increase saving.
The raw survey data are available in Excel format (3.5mb).

Accounting for the stability of the UK terms of trade (434k)
By Conall MacCoille of the Bank's Monetary Policy Unit and Karen Mayhew and Kenny Turnbull of the Bank's Inflation Report and Bulletin Division.
Since the middle of 2007, the sterling effective exchange rate has depreciated significantly. Over the same period the UK terms of trade - the price of the United Kingdom's exports relative to imports - have remained broadly unchanged. Movements in the exchange rate can affect the price of exports relative to imports. But the timing, size and even direction of the impact on the terms of trade will depend on how companies respond to the movement in the exchange rate. This article considers the factors that determine how the terms of trade move in response to an exchange rate depreciation, and investigates what lies behind the stability of the UK terms of trade since 2007.

Recent developments in pay settlements (412k)
By Christopher Hackworth of the Bank's Structural Economic Analysis Division.
Pay settlements negotiated between employers and their employees have fallen sharply during 2009. Pay settlements have averaged below 2%, with many companies freezing pay. The recession, and the associated drop in employers' demand for labour, has been a key influence on settlements. Inflation measures frequently cited in pay negotiations have also moderated, further reducing upward pressures on pay. This short article examines the recent movements in settlements.

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