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Research work published by the Bank is intended to
contribute to debate, and is not necessarily a statement of Bank policy.
UK trade-long-term trends and recent developments
 (54k)
(by Andrew Dumble of the Bank's Structural Economic Analysis
Division)
considers why trade performance matters. It analyses the
factors that determine whether a current account deficit
gives grounds for concern, and considers some longer-term
trends in UK trade performance. It then assesses the impact
of two major influences on recent UK performance-sterling's
depreciation following the suspension of ERM membership
and the recession that has affected its main EU trading
partners-and suggests some elements in the short-term outlook.
Estimating market interest rate and inflation expectations
from the prices of UK government bonds (55k)
(by Mark Deacon and Andrew Derry)
summarises recent Bank research into how best to derive
expectations of interest and inflation rates from the prices
of gilts. It explains the important issues of estimation
and interpretation that arise, and outlines a number of
changes the Bank proposes to make to the techniques it uses.
Company profitability and finance (69k)
(by Kieren Wright of the Structural Economic Analysis Division)
assesses the evolution of firms' financial position over
1993 and 1994 Q1, comparing it with the 198284 recovery.
Profitability has been markedly higher this time; ICCs'
retained earnings were up by over a third in 1993. Firms
have made unprecedented net repayments of bank debt, while
increasing their use of capital markets. Investment has
been higher as a share of GDP, but has not yet picked up
as the recovery has progressed.
Investment appraisal criteria and the impact of low
inflation (26k)
(by Andrew Wardlow of the Conjunctural Assessment and Projections
Division)
looks at the impact of a return to low inflation on corporate
investment decision-making. It considers the different investment
appraisal criteria used by firms-and the role they give
them-and assesses the significance of firms' apparent slowness
to adjust. |
