Credit spreads: capturing credit conditions facing households and firms

Quarterly Bulletin 2014 Q2
Published on 16 June 2014

By Nick Butt and Alice Pugh of the Bank’s Monetary Assessment and Strategy Division.

Changes in credit conditions have been one of the main headwinds affecting the UK recovery since the financial crisis. The likely path of credit spreads is a key determinant of the Monetary Policy Committee’s projections for output and inflation. This article explains how staff at the Bank of England calculate measures of credit spreads which can be used to help inform the Monetary Policy Committee’s central macroeconomic projections.

PDF Credit spreads: capturing credit conditions facing households and firms

This short video discusses some of the key topics from this article.

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