Trends in real rates of return

Quarterly Bulletin 1988 Q3
Published on 01 September 1988

This article discusses the concept of the rate of return on capital employed and shows how it can be calculated. It highlights some of the problems that are likely to be encountered in calculating and interpreting such measures in the United Kingdom. The analysis is then extended to cross-country comparisons of rates of return, and finally some updated estimates are presented for series calculated by the OECD. These suggest that in the post-1980 period the improvement in corporate profitability (on all measures) has been significantly more marked in the United Kingdom than in any of the other G7 economies. Indeed, it may have been sufficient to raise UK company profitability from around the lowest in the group to above the average.

PDFTrends in real rates of return

Other Quarterly Bulletin 1988 Q3 articles

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