Quarterly Bulletin
Bank of England Articles
| 2008 Q2 | Public attitudes to inflation and interest rates  (768k) By James Benford of the Bank's Monetary Assessment and Strategy Division and Ronnie Driver of the Bank's Inflation Report and Bulletin Division. A key upside risk to the medium-term outlook for inflation stems from the possibility that a further period of above-target inflation could lead to persistently elevated inflation expectations. According to the Bank/GfK NOP survey, households' expectations for inflation over the next year have risen markedly. This article focuses on the factors which may have driven the increase, drawing on the results of some additional questions included in the February 2008 survey. It concludes that while the latest increases in households' inflation expectations could be consistent with recent macroeconomic data, increases in households' perceptions of current inflation may also have played some role. The article also summarises the public's attitudes to interest rates and the conduct of monetary policy. |
| 2008 Q1 | The Society of Business Economists' survey on MPC communications (506k) By Tim Taylor and Iain de Weymarn of the Bank's Monetary Assessment and Strategy Division and Bronwyn Curtis, Chairman of the Society of Business Economists. This article reports the results of the Society of Business Economists' (SBE) survey of its members' views on MPC communications. The survey found that, when forming a view about interest rate prospects, SBE members looked first at the macroeconomic data. Communications by the MPC were the next most important input. Overall, a large majority of respondents (87%) found MPC communications either 'helpful' or 'very helpful'. But there was some room for improvement. For example, the results suggested that the MPC could have done a better job of explaining how it responded to developments in the data. The enhanced coverage of risks and identification of key forthcoming data releases in recent Inflation Reports should help to address this issue. But the MPC's communication strategy continues to evolve, and the survey results will be a useful input to that process. The survey data are available in Excel format  (119k) |
| 2007 Q2 | Public attitudes to inflation and interest rates (773k) (By Ronnie Driver of the Bank's Monetary Assessment and Strategy Division and Richard Windram of the Bank's Inflation Report and Bulletin Division). Since 2001, the Bank of England has published an annual article discussing the results from the survey of public attitudes to inflation carried out by GfK NOP on behalf of the Bank. This article analyses the results of surveys up to February 2007. Given the relevance of inflation expectations to the current inflation outlook, this year's article focuses on the pickup in the general public's inflation expectations between 2005 and 2006, and the factors that may have contributed to that rise. It also considers the interactions with the public's attitudes to interest rates. Responses to other questions in the survey are discussed in the annex. |
| Summer 2006 | Public attitudes to inflation The Centre for Central Banking Studies |
| Summer 2005 | Implementing monetary policy: reforms to the Bank of England’s operations in the money market Addendum to Report on modelling and forecasting at the Bank of England |
| Summer 2004 | The
new Bank of England Quarterly Model
(72k) The Bank of England has developed a new macroeconomic model to help prepare the Monetary Policy Committee's quarterly economic projections. The new model does not represent a change in the Committee's view of how the economy works or of the role of monetary policy. Rather, recent advances in economic understanding and computational power have been used to develop a macroeconomic model with a more clearly specified and coherent economic structure than in previous models used by the Committee. This article provides an overview of the new model and includes some simple simulations to illustrate its properties. 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. Perfect partners or uncomfortable bedfellows? On the nature of the relationship between monetary policy and financial stability
(83k)(by Chay Fisher of the Bank's Financial Stability Assessment Division and Melanie Lund of the Bank's Centre for Central Banking Studies). The first annual Chief Economist Workshop, organised by the Bank of England's Centre for Central Banking Studies (CCBS), brought together economists from over 30 central banks. It marked a changing path for the CCBS as it increases its role in providing a forum where central bankers and academics can exchange views on central bank policies and share specialist technical knowledge. The topic for the inaugural meeting was the interplay between monetary policy and financial stability, an issue that has risen to prominence in international debate in recent years. Reform of the Bank of England's operations in the sterling money markets. A consultative paper by the Bank of England
(455k)The Bank issued this paper for public consultation on 7 May 2004. It reviews the objectives and broad framework of the Bank of England's operations in the sterling money markets. Comments were invited by 11 June 2004. |
| Autumn 2003 | The EU
Financial Services Action Plan: a guide
(100k) A Single Market in financial services has long been an EU objective. The integration of financial markets in the EU has progressed much further in wholesale than in retail financial services, with the latter still segmented largely along national lines. The Financial Services Action Plan (FSAP) consists of a set of measures intended by 2005 to fill gaps and remove the remaining barriers to a Single Market in financial services across the EU as a whole. This guide to the FSAP has been prepared by HM Treasury, the Financial Services Authority (FSA) and the Bank of England. The guide is intended to provide an introduction to the FSAP for the UK financial sector, corporate sector and consumer groups, where they are not yet sufficiently familiar with its potential impact, rather than for experts. The guide is being published now, because the FSAP is in the process of being implemented and the UK authorities are keen to ensure that the UK financial sector, corporate sector and consumer groups are consulted on, and fully understand the impact of, FSAP measures. |
| Summer 2003 | An analysis
of the UK gold auctions 1999-2002
(103k) (by Anne Vila Wetherilt of the Bank's Monetary Instruments and Markets Division and Graham Young of the Bank's Foreign Exchange Division). This article examines bidding data for the 17 gold auctions held by the Bank of England on behalf of HM Treasury between July 1999 and March 2002. It employs information on auction participation to evaluate the outcomes of the auctions. Consistent with earlier studies it finds that the prices achieved at the auctions overall were in line with prevailing market prices. The article shows that uncertainty about future gold price movements was an important influence on the outcomes of particular auctions, although no single factor can explain why some auctions resulted in greater demand than others. 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 | Report
on modelling and forecasting at the Bank of England
(173k) Report to the Court of Directors of the Bank of England on the modelling and forecasting systems within the Bank, prepared by Adrian Pagan of the Australian National University and the University of New South Wales. Bank's response to the Pagan Report
(36k) The Bank's regional Agencies
(65k)(by Phil Eckersley, the Bank's Agent for Northern Ireland and Pamela Webber, of the Bank's Inflation Report and Bulletin Division). This article describes the work of the Bank's regional Agencies, updating that published in the November 1997 Quarterly Bulletin. It outlines, in particular, the contribution of the Agencies to the work of the Monetary Policy Committee. |
| Winter 2002 | Money
market operations and volatility in UK money market rates
(160k) (by Anne Vila Wetherilt of the Bank's Monetary Instruments and Markets Division). The Bank of England implements UK monetary policy by influencing short-term interest rates in its money market operations. The way in which the Bank operates in the market has changed significantly over time, but the aim throughout has been to ensure that the behaviour of short-term interest rates is consistent with monetary policy decisions, whether made by the Chancellor of the Exchequer or, since 1997, by the Bank's own Monetary Policy Committee. Operational choices by the central bank, together with developments in the markets themselves, are likely to have affected the volatility of short-term interest rates. This article outlines various measures of volatility in sterling money markets. The Centre for Central Banking Studies
(2.7M)(by Peter Sinclair, Director, Centre for Central Banking Studies). The Bank of England's Centre for Central Banking Studies (CCBS) conducts training, seminars and collaborative research with and for central banks in the rest of the world. It enjoys contact with some 150 of these, and now averages over 1,000 training contacts each year in all. The typical medium is a week-long course in London or abroad. These cover nearly all subjects of concern to central banks, with a growing emphasis, among other topics, on forecasting and econometric modelling for monetary policy. CCBS handbooks and other publications are read all over the world; some 8,000 electronic download requests for handbooks are received each month. |
| Autumn 2002 | Parliamentary
scrutiny of central banks in the United Kingdom and overseas
(82k) (by Jonathan Lepper, formerly of the Secretariat to the House of Commons Treasury Committee and Gabriel Sterne of the Bank's International Economic Analysis Division). This article reviews the parliamentary scrutiny of central banks in 14 countries using the results from a new survey. There is wide variation in the nature of parliamentary scrutiny within the sample. There is no firm evidence in these data, however, to suggest that particular types of framework are associated with different overall levels of parliamentary scrutiny. The Bank of Japan, Bank of England, European Central Bank (ECB) and Federal Reserve each make higher-than-average appearances before their respective parliaments to discuss monetary policy issues, and the technical support provided to the relevant committees is relatively high in the US Congress and in the European Parliament. The level of scrutiny can be circumstance specific, and some inflation-targeting frameworks have defined specific conditions that would trigger scrutiny and the form it would take. Money and credit in an inflation-targeting regime
(85k)(by Andrew Hauser and Andrew Brigden of the Bank's Monetary Assessment and Strategy Division). This article is one of a series on the UK monetary policy process. It discusses how the assessment of money and credit data fits into the Bank's quarterly forecast round. Monetary statistics are available more rapidly than most other economic data and provide early information on the near-term economic outlook. The analysis on money and credit might be used to adjust some output of the Bank's macroeconometric model. It could also help the MPC to assess the risks around its central projections, reflected in the inflation and GDP fan charts. International Financial Architecture: the Central Bank Governors' Symposium 2002
(63k)The Central Bank Governors' Symposium 2002 examined the architecture of the world's financial system. Horst Koehler, Managing Director of the IMF, and the Bank of England's two Deputy Governors at the time, David Clementi and Mervyn King, gave the main addresses. This article summarises what they said. It also gives a precis of eight background papers provided for the occasion. Taken together, these eleven contributions explore general aspects of the international financial architecture, as well as discussing how financial crises may be contained or prevented, and best resolved when they do occur. |
| Summer 2002 | The Bank
of England's operations in the sterling money markets
(70k) This article provides a full description of the Bank of England's arrangements for its money market operations. No changes to the operations are being announced at this time: the article updates the description provided in the May 1997 Quarterly Bulletin to take account of adaptations that have occurred over the past five years. Asset prices and inflation
(108k)(by Roger Clews of the Bank's Monetary Instruments and Markets Division). This article is one in a series on the UK monetary policy process. It discusses some of the interconnections between inflation, monetary policy and asset prices. The Monetary Policy Committee is extensively briefed on asset market developments, along with other developments in the economy, before it makes its policy decisions. |
| Spring 2002 | The London
Foreign Exchange Joint Standing Committee: a review of 2001
(39k) The Foreign Exchange Joint Standing Committee (FXJSC) was established in 1973 under the auspices of the Bank of England, largely as a forum for banks and brokers to discuss broad market issues. The membership of the Committee has grown over the past two years and now includes senior staff from many of the major banks operating in the foreign exchange market in London, as well as brokers, corporate users of the foreign exchange market, and the Financial Services Authority (FSA). The FXJSC met six times in 2001. For most of the year the main focus of the Committee's work was the completion of the London Code of Conduct for Non-Investment Products (NIPS). In the latter months of the year, and partly prompted by the terrorist attacks of 11 September in the United States, the Committee considered whether the London market should form a group to focus specifically on operational issues in the foreign exchange market. The Committee also discussed the impact of e-commerce developments, which will be a recurring theme of discussions during 2002. |
| Winter 2001 | The Bank's
contacts with the money, repo and stock lending markets
(45k) This article looks at the Bank's liaison with the London money markets and in particular at the work of the Sterling Money Markets Liaison Group and the Stock Lending and Repo Committee. The formulation of monetary policy at the Bank of England
(86k)(By Charles Bean, Executive Director for Monetary Analysis and Statistics and Chief Economist, and Nigel Jenkinson, Deputy Director for Monetary Analysis and Statistics). This article explains how the Committee currently discharges its main responsibilities, and describes the key internal processes underlying the monthly MPC meetings and the quarterly forecast round leading up to the publication of the Inflation Report. These processes have evolved over time, and the Committee and the Court of Directors of the Bank review them regularly to ensure that they work efficiently and that they conform to best international standards. The processes will no doubt continue to evolve in the future as the Bank strives to find better ways of operating. |
| Summer 2001 | The Bank
of England inflation attitudes survey
(57k) As part of a new regular series, the market research agency NOP undertook a survey of public attitudes to inflation for the Bank of England in February. The results show that, given a choice between higher interest rates or higher inflation, four times as many people would prefer interest rates to go up, rather than prices. Other results suggest that most people are aware that the Bank, rather than the Government, now sets interest rates. 55% are satisfied with the way the Bank is doing its job; just 10% are dissatisfied. Most people are aware that inflation is low, but only one in three knows that it is currently between 1% and 3%. However, very few expect inflation to rise sharply in the year ahead. The London Foreign Exchange Joint Standing Committee: a review of 2000
(46k)The London Foreign Exchange Joint Standing Committee was established in 1973 under the auspices of the Bank of England, largely as a forum for the different participants in the foreign exchange market to discuss issues of common concern. |
| Spring 2001 | The Kohn
report on MPC procedures
(80k) Report to the non-executive Directors of the Court of the Bank of England on monetary policy processes and the work of Monetary Analysis, prepared by Donald L Kohn on 18 October 2000. Followed by the Bank of England response to the Kohn Report
(32k) |
| November 2000 | Economic
models at the Bank of England
(96k) In April 1999, the Bank of England published Economic models at the Bank of England, a book that described the economic modelling tools that help the Monetary Policy Committee (MPC) in its work. It was made clear at the time that economic models should not be thought of as fixed in form or content, and that model development is a continual process. An update to the book was published in September 2000 covering model developments over the past 18 months, particularly in relation to the Bank's main macroeconometric modelling tool. The update, while giving details of the core macroeconometric model, also refers to other work within the Bank that has added to the range of models used by the MPC. |
| November 1999 | Sterling
market liquidity over the Y2K period |
| August 1999 | Financial
sector preparations for the Year 2000
(17k) (by the Year 2000 team of the Bank's Market Infrastructure Division). Since early in 1998, the Bank of England has been publishing regular progress reports on the preparations of the UK financial sector for the Year 2000. Since these reports began, awareness of the technical and business issues relating to the Year 2000 problem has grown significantly, and most technical remediation and testing work in the UK financial sector has been completed. With much work already undertaken on planning for the Millennium weekend itself, and on contingency arrangements to ensure continued operation of the financial infrastructure in the unlikely event of any major problems, there is now a high level of confidence within the sector that it will be able to maintain 'business as usual'. But it is important not to relax efforts to plan for the Millennium, and the extent of continuing work in the sector suggests that this is well understood. All financial sector infrastructure providers and participants are, to a greater or lesser extent, dependent on the preparedness of others, both inside and outside the sector, in the United Kingdom and abroad. This is a major aspect of risk mitigation and contingency planning work, and reinforces the need for good communication between individual firms, public and private sector bodies, and the public. It is important that this work continues and that vigilance does not slip, in the knowledge of all the work that has already been done. |
| May 1999 | The
transmission mechanism of monetary policy The purpose of the paper is to describe the MPC's view
of the transmission mechanism. The paper is in two parts. Part II provides some broad quantification of the effects of official interest rate changes under particular assumptions. There is inevitably great uncertainty about both the timing and size of these effects. As to timing, in the Bank's macroeconometric model (used to generate the simulations shown at the end of the paper), official interest rate decisions have their fullest effect on output with a lag of around one year, and their fullest effect on inflation with a lag of around two years. As to size, depending on the circumstances, the same model suggests that temporarily raising rates relative to a base case by 1 percentage point for one year might be expected to lower output by something of the order of 0.2% to 0.35% after about a year, and to reduce inflation by around 0.2 percentage points to 0.4 percentage points a year or so after that, all relative to the base case. An effective exchange
rate index for the euro area This article describes the calculation of the index since the initial value of the euro was set on 31 December 1998, and also for the preceding period. The index is calculated by weighting together the individual exchange rates of the eleven euro-area countries against non euro area currencies; so it represents an effective index for the eleven countries as a group, rather than for the euro as a currency. The base year for the series is 1990, the same as the other effective exchange rate series published by the Bank and the IMF. The article compares the Bank's euro-area index with recent movements of the euro against the US dollar, sterling, the Japanese yen and the Swiss franc; with the Bank for International Settlements (BIS) index provisionally used by the European Central Bank (ECB); and with the IMF's 'broad' euro-area index, which has a greater country coverage. It also notes how the introduction of the euro has affected the exchange rate indices for individual countries. |
| May 1998 | The Bank of
England Act (145k) In this article, Peter Rodgers, Secretary of the Bank of England, outlines the main provisions of the Bank of England Act, which gives legislative force to the major changes to the Bank's structure, powers and responsibilities announced by the Chancellor of the Exchequer in May 1997. |
| February 1998 |
The Inflation Report projections: understanding the
fan chart Upgrading the Central Gilts Office |
| November 1997 |
The Bank's regional Agencies The Bank's Centre for Central Banking Studies - an update |
| August 1997 | Changes at the Bank of
England (36k) In this article, Peter Rodgers, Secretary of the Bank of England, outlines the major changes affecting the Bank recently announced by the Chancellor of the Exchequer. These include a new framework for monetary policy - giving the Bank operational responsibility for setting interest rates - and reform of financial services regulation, under which responsibility for banking supervision will be transferred to an enhanced Securities and Investments Board. |
| May 1997 |
The gilt-edged market: the Bank of England's relationship with the gilt-edged market makers and inter-dealer brokers The Bank of England's operations in the sterling money markets Economic models and policy-making |
| February 1997 | New arrangements for issuing banknotes (10k) (By John Bartlett, Head of Banking Services Division). In March 1996, the Bank announced a major restructuring of its regional activity, which will result in the closure of four of its five regional branches. Simultaneously, the Bank announced an expansion of its industrial and economic liaison role in the regions: agencies will continue to operate from each city where branches are closing, as well as from three new locations. The Bank's branches have hitherto played an important role in issuing, sorting and receiving notes, and this article describes some consequential changes to these arrangements. |
| November 1996 | Financial Stability Review-a profile of the new publication |
| August 1996 | Practical issues arising from the single currency (30k) The Bank intends to publish a broadly quarterly series of papers as part of its efforts to ensure that the practical issues arising from the single currency, whether the United Kingdom is inside or outside the euro area, are fully understood and appropriate action is taken. This paper was originally prepared for the House of Commons' Select Committee on the Treasury, and subsequently made publicly available on 10 May. It reports the outcome of the Bank's discussions with banking and other sectors in the United Kingdom in the period up to May. |
| May 1996 | Bank of England Agents' summary of business conditions |
| February 1996 | Changeover to the single currency |
| November 1995 | A code of practice for Bank of England statistics (14k) outlines the code that the Bank is introducing in response to the Government's initiative earlier this year on official statistics. |
| February 1995 | Banking statistics: recent and prospective developments |
| August 1995 | Banking statistics: summary of responses (9k) provides an update following the article in the February Bulletin which sought comments on the bids for new statistics. |
| May 1994 | Inflation over 300 years (351k) (by Helen MacFarlane and Paul Mortimer-Lee of Economics Division) looks back over the period since the Bank's foundation, and offers some reflections on the history of inflation - and on how thinking about inflation has developed - since 1694. |
