By Grigoria Christodoulou of the Bank's Foreign Exchange Division and Pat O'Connor of the Bank's Monetary and Financial Statistics Division.
In April this year, the Bank of England conducted its usual three-yearly survey of turnover in the UK foreign exchange and over-the-counter currency and interest rate derivatives markets, which forms part of the latest worldwide survey co-ordinated by the Bank for International Settlements. The results show that the volume of foreign exchange activity in the United Kingdom rose by 80% between April 2004 and April 2007, increasing the UK share of the global market to 34%. Turnover in OTC currency and interest rate derivatives also rose considerably in the same period. This report sets out the results of the UK survey and then goes on to consider developments in these markets over the past three years.