Summary of Quarterly Bulletin
Summer 2003
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 
(1.5M). |
|
| Markets
and operations
(284k) |
This article reviews developments in sterling and global financial markets, UK market structure and the Bank's official operations since the Spring Quarterly Bulletin. |
| 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. What caused the rise in the UK terms of trade?
(123k) (by Karen Dury and Laura Piscitelli of the Bank's International Economic Analysis Division, Maria Sebastia-Barriel of the Bank's Structural Economic Analysis Division and Tony Yates of the Bank's Monetary Assessment and Strategy Division). The UK terms of trade rose by 15% from 1995 Q3 to 2003 Q1. This article looks at alternative explanations of why this happened, and what they mean for the likelihood that the terms of trade increase will endure. Long-run equilibrium ratios of business investment to output in the United Kingdom
(148k)(by Colin Ellis and Charlotta Groth of the Bank's Structural Economic Analysis Division). Over the past 20 years, the constant-price and current-price ratios of business investment to total output have behaved very differently. In this article we use a simple framework to examine how these two ratios should behave in long-run equilibrium. We investigate the conditions in which each ratio will be constant and, more generally, consider how each might evolve over time. 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. Assessing the extent of labour hoarding
(103k) (by Guillermo Felices of the Bank's Structural Economic Analysis Division). The strength of employment during the recent slowdown is sometimes taken as evidence of labour hoarding. But the extent of such hoarding is difficult to measure. This article reviews different definitions of labour hoarding and a variety of ways of measuring it using aggregate data. Most of these measures indicate that labour has been underutilised during the recent slowdown, implying that firms have indeed hoarded labour to some extent. However, the magnitude of the reduction in utilisation differs across these measures. The evidence also suggests that the recent decrease in utilisation has been limited compared with previous episodes in which labour utilisation was significantly below trend. Asset finance
(84k) (by Andrew Hewitt of the Bank's Domestic Finance Division). Asset finance, in its various forms, is widely used in the United Kingdom. Indeed, one survey has shown it is the largest type of funding for almost a quarter of those small and medium-sized enterprises (SMEs) that use external finance. Some forms of asset finance have grown rapidly in recent years, while others have not; and some new asset finance products have been brought in from the United States. This article provides an overview of asset finance from a UK perspective. |
| Reports | 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. Foreign Exchange Joint Standing Committee e-commerce subgroup report
(54k)This article describes recent developments in electronic trading in the foreign exchange market, based on a report produced by the e-commerce subgroup of the Foreign Exchange Joint Standing Committee. After a brief introduction to e-commerce in the context of the foreign exchange market, it discusses developments in electronic trading, including both single-bank and multi-bank internet-based systems, and explains market initiatives such as 'prime brokerage' and 'white labelling' that have been facilitated by electronic platforms. |
