scholarly journals The Impact of Inflation Uncertainty on Interest Rates in the UK

1999 ◽  
Vol 46 (2) ◽  
pp. 207-218 ◽  
Author(s):  
Hakan Berument
Keyword(s):  
Interest Rates ◽  
Inflation Uncertainty ◽  
The Uk ◽  
The Impact

The Effect of Quantitative Easing on Investment in the US and UK: An SVAR Approach

2018 ◽  
Author(s):  
Thomas Russell
Keyword(s):  
Interest Rates ◽  
Quantitative Easing ◽  
Structural Vector Autoregression ◽  
Bond Yields ◽  
Bond Yield ◽  
Downward Pressure ◽  
The Us ◽  
Historical Relationship ◽  
The Uk ◽  
The Impact

Following the collapse of Lehman Brothers in 2008, the Federal Reserve and the Bank of England implemented asset purchase programs to provide further liquidity to faltering markets, and to continue to place downward pressure on market interest rates. Later called Quantitative Easing, the higher asset prices and lower market yields induced by the purchases were expected to translate into lower market borrowing costs and increased investment. This project focused on estimating the effect of Quantitative Easing on real investment in the US and UK up to 2010. First, the historical relationship between bond yields and investment was estimated using a time series econometric model called a structural vector autoregression. Next, using the historical relationship between bond yields and investment, the impact of the asset purchases on investment was calculated using the bond yield changes induced by  Quantitative Easing announcements. Deviations in bond yields on Quantitative Easing announcement dates suggested an impact on investment of 5.93% in the US, and an impact of 3.37% in the UK. Moreover, both the US and UK econometric results are statistically significant. Taking into account the econometric assumptions required to estimate the impact of Quantitative Easing on investment, the results in this project should be viewed with caution. However, the results will be useful in framing future thought on Quantitative Easing as a tool to provide macroeconomic stability 

LIBOR, base rate spreads and the UK housing market

2015 ◽  
Vol 8 (1) ◽  
pp. 118-134 ◽  
Author(s):  
Martin Hinch ◽  
Jim Berry ◽  
William McGreal ◽  
Terry Grissom
Keyword(s):  
Time Series ◽  
Interest Rates ◽  
House Prices ◽  
House Price ◽  
Base Rate ◽  
Percentage Change ◽  
Content Type ◽  
Change Models ◽  
The Uk ◽  
The Impact

Purpose – The purpose of this paper is to analyse how London Interbank Offered Rate Index (LIBOR) and the spread between LIBOR and the base rate of interest as set by the Bank of England (BoE) influences the variation in house prices in the UK. Design/methodology/approach – This paper uses monthly data over a long time series, since 1986, to investigate the relationships between house price and LIBOR. Data are drawn from several different sources to include housing, financial and macro-economic variables. The time series is sub-divided into a series of splines based on stages in the economic and property market cycle. Both value-based and percentage change models are developed. Findings – The results show that BoE base/LIBOR margin variable has a strong positive and significant effect on house price; however, the percentage change model infers a weaker and inverse relationship. The spline analysis re-emphasised the significance of the BoE base/LIBOR margin variable. Where variation between base rates and LIBOR is reduced, a significant positive effect can be observed in the average house price; however, where significant variation exists, the BoE base/LIBOR margin has little effect and LIBOR itself becomes a significant driver. Research limitations/implications – The results highlight that the predictive qualities of the BoE base/LIBOR margin, as the contribution of this margin to the explanation of house price, exceeds both the base rate and LIBOR variables individually. Also highlighted is the contribution of unemployment to the explanation of house price. In both the value and percentage change models, unemployment is shown as a negative and highly significant contributor. Originality/value – Previous papers have demonstrated the important linkage between house price and interest rates, the originality in this paper lies in examining the impact of LIBOR and the spreads between LIBOR and base rate as key variables influencing variation in UK house prices.

scholarly journals Medium-Run Implications of Changing Demographic Structures for the Macro-Economy

2017 ◽  
Vol 241 ◽  
pp. R58-R64 ◽  
Author(s):  
Yunus Aksoy ◽  
Henrique S. Basso ◽  
Ron P. Smith
Keyword(s):  
Interest Rates ◽  
Poor Performance ◽  
Theoretical Work ◽  
Output Growth ◽  
Annual Growth Rate ◽  
Demographic Structure ◽  
Real Interest Rates ◽  
Long Run ◽  
The Uk ◽  
The Impact

While there may be an important, but transitory, cyclical component in the poor performance of the past decade, we will emphasise the secular forces: the impact of demographic structure and innovation. We draw on the empirical and theoretical work reported in Aksoy, Basso, Smith and Grasl (2015), ABSG, about the impact of changes in demographic structure on macroeconomic outcomes. This suggests that changes in age profile not only have significant implications for savings, investment, real interest rates and growth but also for innovation. The size of the effects seems plausible. For instance, if in 2015 the UK had the 1970 age structure, it would have added 0.68 percentage points to the long-run annual growth rate. The model suggests that the population ageing predicted for the next decades will tend to reduce output growth and real interest rates across OECD countries.

Rental rate as an alternative pricing for Islamic home financing

2016 ◽  
Vol 9 (4) ◽  
pp. 601-626 ◽  
Author(s):  
Rosylin Mohd Yusof ◽  
Mejda Bahlous ◽  
Roszaini Haniffa
Keyword(s):  
Interest Rates ◽  
Islamic Law ◽  
Real Effective Exchange Rate ◽  
Alternative Measure ◽  
Islamic Banks ◽  
Content Type ◽  
Long Run ◽  
Rental Rate ◽  
The Uk ◽  
The Impact

Purpose This paper aims to contribute to the banking and housing market literature by proposing an alternative measure of rate of return for Islamic banks that is based on the rental rate of the property. This alternative Islamic mortgage pricing mechanism could be adopted by Islamic banks as a replacement for mortgage rates if it is found to be independent from any form of interest rates as required by Islamic law. Design/methodology/approach By investigating the short run and long run dynamics between rental price index (RPI) and the proposed Islamic Rental Rate (RR-I) and, three selected macroeconomic indicators in the UK via autoregressive distributed lag model, the authors examine the link between RPI, RR-I and the real economy. Findings The findings provide evidence that while RPI in the UK is significantly related to three leading macroeconomic variables, namely, gross domestic product (GDP), real effective exchange rate and interest rates measures, while RR-I is only impacted by changes in GDP. More importantly, the authors show that there is no short or long run dynamics between the rental rate and any form of interest rates. Research limitations/implications This paper did not attempt to investigate the impact of the physical attributes of the rental property to formalize the model describing the relationship between RPI and RR-I. Also, other macroeconomic factors like household income growth, risk, house value growth rate and taxation could be included in future models. Practical implications As Rental Rate is not linked to the macroeconomic determinants, it is therefore more stable, resilient and sustainable and, at the same time, making the financing less risky for both parties, as they are less susceptible to economic vulnerabilities. Social implications Some calculations incorporating the proposed RR-I can also be extended to the pricing of products based on other contracts such as Tawarruq, Bai Bithaman Ajil or even Murabahah for a fairer and just pricing to both the banks and customers. Originality/value The results suggest that Islamic banks should consider incorporating the proposed rental rate (RR-I) when pricing their home financing products, as this will lead to less dependence on interest rates for benchmarking. In addition, using the proposed rental rate (RR-I) reduces the exposure to the subjective evaluation by property valuators and speculative macroeconomic elements.

scholarly journals An Estimate of the Impacts of the Bank of England’s Quantitative Easing Programme on UK Economic Growth

2018 ◽  
Vol 25 (3) ◽  
pp. 51-65
Author(s):  
Sławomir I. Bukowski ◽  
Robin Gowers
Keyword(s):  
Interest Rates ◽  
Small Degree ◽  
Gdp Growth ◽  
Quantitative Easing ◽  
Policy Tool ◽  
Bank Of England ◽  
Macroeconomic Impacts ◽  
The Uk ◽  
The Impact ◽  
Over Time

This paper reviews the reasons for and impacts of quantitative easing by the Bank of England.  It analyses the macroeconomic impacts of this policy tool on the UK economy across the period 2008-16.  It compares the impacts of each round of quantitative easing to assess how the impacts changed over time. The authors implemented econometric analysis based on the VAR model. This analysis indicated that the Bank of England’s monetary policy influenced GDP growth by a relatively small degree during the period studied. The impact of changes in the monetary base (M3) explained a bigger part of GDP growth than the decreases in interest rates and exchange rates.  Over time the impact of this policy response diminished.

The Film World’s Cooperative Store: Institutions and Films of the 1930s and 1940s

2018 ◽  
Author(s):  
C. Claire Thomson
Keyword(s):  
World War Ii ◽  
Meat Products ◽  
Public Information ◽  
Early History ◽  
World War ◽  
International Context ◽  
German Occupation ◽  
History Of ◽  
The Uk ◽  
The Impact

This chapter traces the early history of state-sponsored informational filmmaking in Denmark, emphasising its organisation as a ‘cooperative’ of organisations and government agencies. After an account of the establishment and early development of the agency Dansk Kulturfilm in the 1930s, the chapter considers two of its earliest productions, both process films documenting the manufacture of bricks and meat products. The broader context of documentary in Denmark is fleshed out with an account of the production and reception of Poul Henningsen’s seminal film Danmark (1935), and the international context is accounted for with an overview of the development of state-supported filmmaking in the UK, Italy and Germany. Developments in the funding and output of Dansk Kulturfilm up to World War II are outlined, followed by an account of the impact of the German Occupation of Denmark on domestic informational film. The establishment of the Danish Government Film Committee or Ministeriernes Filmudvalg kick-started aprofessionalisation of state-sponsored filmmaking, and two wartime public information films are briefly analysed as examples of its early output. The chapter concludes with an account of the relations between the Danish Resistance and an emerging generation of documentarists.

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