Quarterly Bulletin
Annual Articles
| 2008 Q2 | Public attitudes to inflation and interest rates A review of the work of the London Foreign Exchange Joint Standing Committee in 2007 |
| 2007 Q2 | Public attitudes to inflation and interest rates A review of the work of the London Foreign Exchange Joint Standing Committee in 2006 |
| Summer 2006 | Public attitudes to inflation A review of the work of the London Foreign Exchange Joint Standing Committee in 2005 |
| Summer 2005 | A review of the work of the London Foreign Exchange Joint Standing Committee in 2004 Public attitudes to inflation |
| Winter 2004 | The
external balance sheet of the United Kingdom: recent developments
(107k)(by John Elliott and Erica Wong Min of the Bank's Monetary and Financial Statistics Division). The United Kingdom's external balance sheet currently records assets and liabilities of more than £3.5 trillion. Both sides of the external balance sheet grew sharply during 2003, continuing the marked expansion that has been recorded since the early 1990s. This article examines recent trends within the balance sheet components with reference to the associated financial flows and income. There is a particular focus on data reported by monetary financial institutions. The article discusses some of the problems involved in compiling an external balance sheet, examining two key issues through the estimation of a breakdown of revaluations to outstanding stocks and a discussion of foreign direct investment data. We also report on current domestic and international initiatives aimed at further improving the quality of external statistics. |
| Summer 2004 | Public
attitudes to inflation
(106k) (by Norbert Janssen of the Bank's Inflation Report and Bulletin Division). Since November 1999 the market research agency NOP has carried out quarterly and annual surveys of public attitudes to inflation, on behalf of the Bank of England. As part of an annual series, this article analyses the results of the surveys from May 2003 to February 2004. Public opinion on most issues has changed little over the past year. Around one in five people thought retail price inflation had been between 2% and 3% over the past year and a similar proportion expected price increases in that range. Both in November and February, a large majority of respondents expected interest rates to rise over the next year, though nearly 40% thought the economy would fare best if rates stayed where they were. Just over half the sample population remained satisfied with the way the Bank is setting interest rates. A review of the work of the London Foreign Exchange Joint Standing Committee in 2003
(77k) This note reviews the work undertaken by the London Foreign Exchange Joint Standing Committee during 2003. |
| Winter 2003 | Financial
stability and the United Kingdom's external balance sheet
(170k) (by Mhairi Burnett of the Bank's Monetary and Financial Statistics Division and Mark Manning of the Bank's Domestic Finance Division). This article, one in an annual series, examines the United Kingdom's financial transactions with the rest of the world, paying particular attention to the implications for financial stability. In recent years, the United Kingdom's stocks of external assets and liabilities have increased considerably, and each now exceeds £3.5 trillion. This is three times UK GDP and around a third of the United Kingdom's total financial assets. The monetary financial institutions (MFI) sector accounts for approximately half of the external balance sheet, reflecting both the international orientation of UK-owned banks and the cross-border activities of foreign-owned UK-resident banks. The article begins with a conceptual discussion of how external positions might affect financial stability, before turning to recent developments. The principal focus is on the MFI and private non-financial corporate (PNFC) sectors, in which the largest external positions exist. The discussion draws upon data from a variety of sources, including the Pink Book, sectoral financial balance sheets, the Bank of England and the IMF. |
| Summer 2003 | Public
attitudes to inflation
(69k) The market research agency NOP has been carrying out quarterly and annual surveys of public attitudes to inflation on behalf of the Bank since November 1999. As part of a regular series, this article describes the results of the full annual survey that took place in February 2003. It shows that public opinion remains fairly stable on most issues, though expectations of future interest rate movements do of course fluctuate. Those who think rates should stay where they are remain the largest group, but among the rest, the public was evenly divided over whether it would be better for Britain's economy for rates to rise or fall over the next few months. The proportion satisfied with the way the Bank is doing its job of setting interest rates has fallen since last year. But the decline in the approval ratings may have reflected the reduction in awareness of the Bank's policies, when rates were unchanged for a long period. |
| Spring 2003 | A
review of the work of the London Foreign Exchange Joint
Standing Committee in 2002 |
| Winter 2002 | The
external balance sheet of the United Kingdom: recent developments
(98k) (by Robert Westwood of the Bank's Monetary and Financial Statistics Division and John Young of the Bank's Domestic Finance Division). The external balance sheet (or international investment position) gives the most complete picture of the stock position of a country in its financial transactions with the rest of the world. The very breadth of coverage of the data leads inevitably to problems of measurement and valuation. Nevertheless, subject to certain qualifications, the data can throw some light on macroeconomic and financial stability issues related to the United Kingdom's cross-border financial links. This article, one in an annual series, discusses the recent evolution of the United Kingdom's external balance sheet, reviewing along the way some of the main methodological issues that impinge on an interpretation of the data. It concludes that, despite a persistent current account deficit, the balance of probability is that the United Kingdom still has net external assets, or at least the capacity to generate net investment income from overseas. There are also some grounds for optimism that the structure of its assets and liabilities has left the United Kingdom in a fairly strong position to withstand financial shocks. Public sector debt: end-March 2002
(73k)(by Paul Burton of the Bank's Monetary and Financial Statistics Division). Public sector net debt (PSND) stood at £310.0 billion as at end-March 2002, £4.1 billion higher than at end-March 2001. This was equivalent to 30.4% of GDP, some 0.9 percentage points lower than at end-March 2001. This annual article examines the structure of the financial liabilities of the UK public sector. |
| Winter 2001 | The
external balance sheet of the United Kingdom: implications
for financial stability?
(188k) In 2000, UK gross external assets and liabilities grew by more than 20%, boosted particularly by international mergers and acquisitions and international banking activity. In net terms, UK external liabilities fell moderately but remained substantial, at about 13% of annual GDP. This fall was associated with changing nominal values of UK external assets: the currency denomination of UK external assets and liabilities means that, other things being equal, a lower exchange rate reduces UK net external liabilities via revaluation changes. As reported in last year's article in this annual series, the UK net liability position may be misleading: UK net external assets are probably underestimated because of the way foreign direct investment is calculated. Policy-makers in the international community have focused on identifying key tools that could be useful for monitoring and analysing external balance sheet vulnerabilities. The second section of this article looks at the extent to which the United Kingdom can compile and assess the IMF's set of key indicators of external vulnerability. Public sector debt: end-March 2001
(116k)The nominal value of public sector net debt outstanding fell by 9.9% during the financial year to end-March 2001. At end-March 2001, the net debt represented 31.6% of GDP, the lowest figure since 1992 and 5 percentage points lower than at end-March 2000. This article analyses the financial liabilities of the public sector, and considers the implications of the current level and structure of UK government debt, including in the context of analysing the national balance sheet as part of the Bank's financial stability assessments. |
| Spring 2001 | Sterling
wholesale markets: developments in 2000
(136k) Sterling wholesale markets grew by 5% in 2000, less quickly than in 1999. The money, corporate bond and swap markets continued to expand, whereas the amount of gilt-edged stock outstanding was broadly unchanged. Liquidity in sterling markets stabilised during the year; in some markets turnover and liquidity increased. Government cash management transferred to the UK Debt Management Office; the Bank of England's open market operations continued as before. |
| November 2000 | The
external balance sheet of the United Kingdom: implications
for financial stability?
(96k) This article looks at developments in the UK external balance sheet in the wider context of the UK economy and financial system. UK net external liabilities increased sharply in the late 1990s. This largely reflected changing asset values, including exchange rates, rather than financial flows. The currency composition of UK external assets and liabilities means that, other things being equal, a falling exchange rate would reduce UK net external liabilities via valuation changes. In addition, the way foreign direct investment is valued could mean that UK external assets are significantly underestimated. The article also analyses the impact of banking sector business on the UK external balance sheet. UK external short-term debt is large because of the scale of international banking activities. A comparatively small proportion of this is carried out by UK-owned banks. |
| August 2000 | Public
sector debt: end-March 2000
(64k) Public sector net debt fell by 2.8%, at nominal value, during the financial year to end-March 2000. This was the second successive annual reduction, following seven consecutive annual increases up to 1998. At end-March 2000 public sector net debt represented 36.6% of GDP, the lowest figure since 1994 and 3 percentage points lower than at end-March 1999. This article continues the annual series in the Quarterly Bulletin analysing the outstanding financial liabilities of the public sector. It discusses developments during the year, and considers the implications of the current level and structure of UK government debt. |
| February 2000 | Sterling
wholesale markets: developments in 1999
(99k) Sterling wholesale markets grew by £800 billion in 1999, though much of this reflected increased market values rather than new issuance. Though the size of markets grew, liquidity in a number of core markets fell, reflecting both the retreat of risk capital following the global financial crisis of 1998 H2 and, in the gilt-edged market, reduced government borrowing and hence lower bond supply. The approach of the millennium date change also affected markets in 1999 H2, though liquidity and turnover in December turned out higher than many had expected. The Bank made two changes to its open market operations in 1999: a major permanent widening in the list of collateral eligible in OMOs; and, from October, the introduction of temporary three-month repos designed to help firms plan their liquidity over the year-end. |
| November 1999 | Public
sector debt: end March 1999
The external balance
sheet of the United Kingdom: recent developments The article describes how financial flows and changing asset values affect the United Kingdom's external balance sheet. It relates investment income flows and capital gains to stocks of assets and liabilities, and compares the United Kingdom's international investment position with those of other major economies. A box gives details of the UK participation in the IMF-sponsored coordinated portfolio investment survey. |
| February 1999 | Sterling
wholesale markets: developments in 1998 The external balance
sheet of the United Kingdom: recent developments |
| November 1998 | Public
sector debt: end-March 1998 The Office for National Statistics published the UK National Accounts in line with the updated European System of Accounts (ESA95) for the first time in September. This has had a number of implications for how debt levels are compiled. To ensure consistency with the previous articles in this series during the transition period, the data presented here are based on the previous accounting system. However, details of the changes and estimates of how they affect public sector debt are explored in the box on pages 334-35.
|
| May 1998 | Recent developments in financial
markets |
| February 1998 | Gilt-edged and sterling money markets: developments in 1997 (143k) This article reviews developments in the gilt-edged and sterling money markets during 1997. There have been significant changes in these markets, as a result of both official and private sector initiatives and external developments. The economic backdrop was propitious, with economic growth sustained in the United Kingdom for the fifth successive year, and inflation remaining low. Bond yields fell, by more in the United Kingdom than in many other countries. In Europe, the prospect of EMU came into sharper focus, with implications both for market yields and trading arrangements. The Bank introduced reforms to its sterling money-market operations in March, widening the range of counterparties with whom the Bank would deal, and including gilt repo as a regular instrument in the Bank's open market operations. As a corollary, the Bank's counterparties in the gilt market, the gilt-edged market makers, were no longer required to be separately capitalised or specially supervised. Later in the year, the upgrading of the Central Gilts Office service at the Bank was completed, enabling the start of gilt strips trading. Looking ahead, work is under way to set up the UK Debt Management Office, which will assume responsibility for the Government's debt management from April 1998; changes to bring the sterling markets closer into line with the prospective euro markets are planned for 1998; and, following the introduction of index-linked auctions in the United States, HM Treasury is consulting the UK market about a similar initiative here. |
| November 1997 |
Public sector debt: end-March 1997 The external balance sheet of the United Kingdom: recent developments |
| February 1997 | The gilt-edged market: developments in 1996 (128k) The gilt-edged market development programme continued in 1996, and gilt repo trading concluded a successful first year. Ten-year gilt yields were little changed at year-end from the previous year, but the yield curve was flatter. Gilt sales raised nearly £40 billion in 1996, taking the value of gilt-edged stock outstanding to £285 billion. Further reforms to the issuance process contributed to strong auction results and rapid sales of tap stocks in 1996. The year concluded with the Bank's proposals to extend its daily money-market operations to operate in gilt repo and to abolish the requirement that the gilt-edged market-makers be separately capitalised entities. |
| November 1996 |
The external balance sheet of the United Kingdom: recent developments Public sector debt: end-March 1996 |
| February 1996 | The gilt-edged market: developments in 1995 |
| November 1995 |
The net debt of the public sector: end-March 1995 The external balance sheet of the United Kingdom: recent developments |
| August 1995 | Company profitability and finance |
| February 1995 | The gilt-edged market: developments in 1994 |
| November 1994 |
The net debt of the public sector: end-March 1994 The external balance sheet of the United Kingdom: recent developments |
| August 1994 | 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. |
| February 1994 | The gilt-edged market: developments in 1993 describes activity in the gilt and related derivatives markets and the business of the GEMMs. In a year in which yields fell markedly, the PSBR was funded without serious difficulty. Turnover in gilts rose, as did the capital of the GEMMs, whose operations remained profitable. |
