Summary of Quarterly Bulletin
Spring 2005
By Date
| By Topic
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How to Obtain
| Each article is available as
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Markets and operations
(317k) |
This article reviews developments since the Winter Quarterly Bulletin in sterling and global financial markets, in market structure and in the Bank's balance sheet. |
| 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.
Dealing with data uncertainty
(95k) (by James Ashley, Ronnie Driver, Simon Hayes and Christopher Jeffery of the Bank's Conjunctural Assessment and Projections Division). True values of key macroeconomic variables are unobservable and can only be estimated. A key question for the Monetary Policy Committee is how best to take account of the resultant uncertainty in its economic assessment. Official estimates of economic variables are produced by the Office for National Statistics (ONS), and some private sector organisations publish surveys of business activity that may also give clues as to the underlying state of the economy. This article presents a simple methodology for deriving 'best guesses' of the true values of economic variables by weighting together official estimates and information from business surveys. Indicators of short-term movements in business investment
(230k)(by Sebastian Barnes of the Bank's Structural Economic Analysis Division and Colin Ellis of the Bank's Inflation Report and Bulletin Division). Business surveys provide more timely news about investment than official data. The surveys also include forward-looking information. This article examines some survey-based indicators of business investment. Using simple techniques, several indicators are found to contain information about the path of investment. Moreover, as official business investment data are often revised, survey data can also usefully supplement the official data when interpreting recent movements in investment. Divisia money
(116k) (by Matthew Hancock of the Bank's Monetary Assessment and Strategy Division). This article reviews the Bank's measure of Divisia money - a gauge of the money supply that gives greatest weight to those components most used in transactions - and explains some recent changes to its calculation. These changes aim to make the Bank's series more theoretically appealing and to make use of some recently developed statistics. Five improvements have been made. First, a new approach has been introduced to determine the benchmark interest rate. Second, new effective interest rate data have been incorporated. Third, the level of aggregation has been changed slightly. Fourth, non break-adjusted levels are now used as the denominator in the Divisia calculation. Finally, a series for aggregate Divisia excluding other financial corporations, and a set of monthly series, have been introduced. In this article we begin with a discussion of the purpose of Divisia money, then we set out the changes that have been made, and the motivation behind them. Throughout we describe the impact of the changes on the Bank's series. |
| Reports | Inside the MPC
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