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.
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.
National saving (488k)
(By Simon Whitaker of the Bank's Structural Economic Analysis Division). The level of national saving is important for policymakers as it can contain information about future prospects for growth and inflation. This article starts by comparing the current level of saving with a simple benchmark. However, this benchmark ignores important issues such as the relevant measure of saving and capital and the ability to borrow from overseas. The article considers how various measurement issues and economic shocks could allow the level of saving to differ from this benchmark, and also looks at the outlook for national saving in the medium term.
Understanding investment better: insights from recent research (564k)
(By Ursel Baumann and Simon Price of the Bank's Structural Economic Analysis Division). Motivated by a number of puzzles about the recent behaviour of business investment in the United Kingdom (including the boom in the late 1990s and the prolonged weakness thereafter), this article brings together some of the main results of recent research on investment undertaken by the Bank and puts them into the wider context of the investment literature.
Financial globalisation, external balance sheets and economic adjustment (728k)
(By Chris Kubelec of the Bank's International Finance Division and Bjorn-Erik Orskaug and Misa Tanaka of the Bank's International Economic Analysis Division). This article investigates the implications of the size and structure of external balance sheets for the impact of shocks on domestic economies. Increased integration of international financial markets in recent years, coupled with larger international cross-holdings of assets and liabilities, has made the balance sheet channel of transmission of shocks grow in importance. This article constructs detailed decompositions of the balance sheets of the United Kingdom, the United States and Canada. These are used to illustrate what different features of balance sheets imply about the effects on domestic economies from different shocks. Finally, the impact on UK and US external balance sheets from some hypothetical scenarios is examined, and some simple rules of thumb are used to draw out the potential implications for consumption behaviour.
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