This commentary describes the main features of the economy at home and abroad as background to financial developments, and gives a more detailed account of points made in the General assessment.
- Abroad, low activity has contributed to exceptional weakness in commodity prices. Nominal interest rates have fallen.
- In the United Kingdom, output has also remained low. Inflation has declined.
Later sections deal with financial developments in the United Kingdom. The rise in bank lending to companies showed some sign of slackening in the summer. Lending to the personal sector, however, continued to grow rapidly, with mortgage lending the main area of expansion; nevertheless, the housing market remained subdued. Monetary growth was contained within the target range; interest rates have fallen substantially.