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Presents discussion papers on the European economy. `Unemployment Dynamics in the UK,' by S.G.B. Henry and J. Nixon; `Bootstrapping Sequential Tests for Multiple Structural Breaks,' by A. Banerjee, S. Lazarova and G. Urga; `International Linkages in Short and Long-Term Interest Rates,' by G.M. Caporale and G. Williams.

Both unemployment and non-employment in Great Britain fell steadily after 1993. The ratio of jobs to the working age population— the employment rate— rose. But the increasing regional dispersion of employment rates remains a puzzle. By 2000–01, this dispersion was close to its 1974 and 1985 peak levels, though it has narrowed since 2001. This paper byJohn Muellbauer&Gavin Cameron1 examines this puzzle in the context of different measures of the employment rate and examines what we know and what we do not know about what drives relative employment rates across the British regions. It summarises the findings from an econometric study and examines the outlook for relative employment across the British regions. [ABSTRACT FROM AUTHOR]

HM Treasury produced its long-awaited assessment of the five economic tests in June, having signalled the basic decision months in advance. The Treasury sees important impediments to adopting the Euro in UK housing and credit markets, and makes some proposals for further investigation and policy. In this paper, John Muellbauer considers the policy options. [ABSTRACT FROM AUTHOR]

In common with other developed countries, the UK has seen the relative importance of the service sector grow, accounting for an ever greater share of employment and output— a trend that has accelerated over recent decades. At the same time, globalisation means that international trade is of increasing importance as a share of UK expenditure. With the traded goods sector dwindling in importance, what are the implications for the current account? This paper examines the changing structure of the UK economy and prospects for the current account. Although the current account is expected to remain in deficit for the foreseeable future, the size of the deficit is likely to remain manageable as growing surpluses from trade in services and investment income offset a widening goods deficit. [ABSTRACT FROM AUTHOR]

The liberalisation of credit constraints in the 1970s for UK consumers has had important implications for the housing market and consumer spending. This paper by John Muellbauer1 examines the factors that have driven soaring consumer debt and house price levels; in particular those observed since the mid-1990s. By relying on recent econometric evidence and trends in credit availability, real income per head, nominal and real after tax mortgage rates, measures of perceived risk and broad demographic trends, it also analyses the prospects for house prices, mortgage debt and unsecured debt over the coming years. The outlook is for a‘soft landing’ in the housing market and associated declines in the rate of growth of consumer debt, which, although probably not smooth, does suggest the underlying situation is more benign and less crisis-prone than it was in 1988–89. [ABSTRACT FROM AUTHOR]

The Chancellor has asked Professor David Miles to examine the UK market for longer-term fixed rate mortgages. This paper by Adrian Cooper, which is part of a study commissioned by the Miles Review, presents the results of a series of simulations using the OEF Model of the UK economy to investigate the contribution of the housing market to macroeconomic volatility and the implications of changing the structure of mortgage finance from the current variable rate system linked to short-term interest rates to a fixed rate system linked to long rates. The main findings are that the housing market has been a contributor to past volatility in the UK economy, and that moving to a fixed rate structure would reduce the impact of a change in interest rates on key macroeconomic indicators. [ABSTRACT FROM AUTHOR]

A much clearer understanding is needed of the forces driving the current upsurge in the mortgage market and of the key factors contributing to the exceptional growth of mortgage indebtedness. It would then be easier to judge whether the widely-expected downswing in mortgage lending will be reasonably limited and gradual, or more pronounced and protracted. This paper, by Richard Talbot, develops an appropriate analytical framework and model that traces the composition of incremental mortgage borrowing over the period since the mid-1980s. Estimates have been compiled for the various elements of additional borrowing using data from the Survey of Mortgage Lenders and the Bank of England back to 1993, and other statistics on the earlier composition of bank approvals and building society advances. This analysis of the debt aggregation process suggests that, at the level of the individual household, people simply will be unable, and indeed unwilling, to go on absorbing the relatively large amounts of incremental debt implied by many medium-term forecasts for mortgage lending. [ABSTRACT FROM AUTHOR]

This paper, prepared for the No Campaign, uses the OEF Global Macroeconometric Model to assess the impact of the housing market on the UK's convergence with the Eurozone. The OEF Model provides the ideal framework for such analysis, as it incorporates a detailed system for forecasting UK house prices, transactions, mortgage borrowing and their interaction with consumer spending and the wider economy, within the context of a model of the Eurozone economy. Our analysis suggests that, if the government were to wish to take the UK into EMU, action to reduce the impact of changes in interest rates on the housing market would be beneficial in improving the UK's economic stability. [ABSTRACT FROM AUTHOR]

Her Majesty's Treasury is due to report in June 2003 on the economic case for the UK adopting the Euro. One criterion concerns the extent of economic convergence between the UK and the European Union countries. Differences in financial, credit and housing institutions between countries present one important subset of constraints to sustained convergence (Maclennan et al, 1998) - largely neglected in the economic literature on common currency areas. These types of differences create tension within the Eurozone. Empirical evidence supporting these concerns has emerged in signs of overheating in the Netherlands, UK and some of the fringe economies, and in the relative stagnation of Germany and Italy. The UK's buoyancy, however, is accompanied by serious economic imbalances, with consequent risks of instability. These would be exacerbated should the UK be prematurely locked into an exchange rate and interest rate regime unresponsive to domestic conditions. There is much to learn from European experience: from Germany and Italy, on the consequences of illiberal economic structures; from The Netherlands, on some of the risks of liberal credit markets; and from Denmark, with a liberal credit market but rational property taxation. In this paper, John Muellbauer argues that convergence does not have to be fully achieved, if there is a counterbalancing policy instrument to mitigate some of the effects of these slow-to-dissipate differences. Specifically in the UK, a reformed system of property taxation would contribute greatly to long-term stability and the preservation of economic balance. [ABSTRACT FROM AUTHOR]

It is widely perceived that credit conditions for UK consumers, particularly in the mortgage market, have been radically liberalized since the 1970s. The implications for the housing market and consumer spending have been important. This article by John Muellbauer draws on a 1997 paper by the author which examined data from the Survey of Mortgage Lenders to learn, from information about loan-to-value ratios of first-time buyers, classified by region, about changes in mortgage credit conditions. By controlling for economic and demographic influences on credit conditions, a single time-varying index of mortgage credit conditions was extracted from these SML data. This index rises in the 1980s, peaking towards the end of the decade. It retraces part of its rise in the early 1990s before rising again by 1995 to a level not far below the previous peak. The article considers whether more recent data suggest a further liberalisation of mortgage credit conditions. It draws on joint research with others to discuss possible implications for consumer spending, house prices, the volume of property transactions and mortgage defaults. [ABSTRACT FROM AUTHOR]

The source of the present recession in the UK and elsewhere was the world-wide financial crisis that followed a generalised collapse in inter-bank and bank lending to the private sector, which led to huge falls in spending and a collapse in output in most developed countries. By effectively ignoring this amplified credit effect, supply-side explanations place their emphasis instead on changes to the pattern of productivity shocks, downgrades in risk premia or shifts in aggregate production functions. Our review of some high profile examples of supply-side accounts suggests that the evidence is against them and a world-wide fall in aggregate demand seems a more likely explanation. Nonetheless, the supply-side view still appears to be the approach preferred by the Treasury suggesting, as it does, that present levels of slack in the economy are small. The Coalition's main response to the recession here has been fiscal consolidation, based on the claim that the jump in the fiscal deficit was not due to the world recession and was instead caused by Labour's profligate spending. Also, the Coalition's strategy treats the two problems; that of ensuring recovery and that of achieving a sustainable debt ratio in the longer term as if they were the same problem. Not only are these two claims wholly wrong, the risks they pose to the economic future of the country are very large and of long duration. It is already evident that the 'cuts now' programme has retarded the recovery as it assumes, incorrectly, that the deficit can be reduced by making cuts to spending without these having adverse effects on economic growth. And its precipitate rush to cut Welfare and non-investment Education budgets are visibly leading to worse, not better, efficiency outcomes in these key sectors, in spite of government claims to the contrary. A low wage, low productivity economy seems a highly likely outcome of the present policy over the medium to longer term. [ABSTRACT FROM AUTHOR]

▪ After enduring one of the deepest downturns in 2020, the UK has enjoyed one of the strongest rebounds in 2021. The 'easy' gains from reopening are behind us, and unprecedented policy support is being withdrawn, so the recovery is now entering a tougher phase. But provided the Omicron Covid variant doesn't result in more serious restrictions, we're sticking to our upbeat view of the UK's prospects for 2022 based on four key themes shaping the outlook.▪ How consumers and firms treat their excess savings. A lack of spending opportunities has resulted in UK households accumulating excess savings worth 10% of income during the pandemic. Behaviour has been slow to change, but we still expect consumers to dip into this cash pile to fund spending this year. If they don't, squeezed household finances could bring the consumer recovery to a halt. Firms have also accumulated big cash piles and, prompted by the tax super‐deduction, we expect they'll spend some of it.▪ Inflation fears will calm. Another large rise in the energy price cap and the restoration of the VAT rate for the hospitality sector to 20% are likely to push CPI inflation to almost 6% in April 2022. But we expect it to slow sharply thereafter. There's little evidence of underlying pressures building, commodity prices should fall back, and large, negative, base effects will come into play.▪ Markets will be disappointed by the pace of rate hikes. Market pricing implies that Bank Rate will be 1% at the end of 2022. This looks too aggressive. With inflation concerns set to ease, we expect Bank Rate to end 2022 at 0.75%.▪ The threat of a UK‐EU trade war will linger. Negotiations on changes to the Northern Ireland protocol are ongoing. But even if they prove successful, the threat of an UK‐EU trade war is unlikely to go away given the prevalence of strong ideological views in influential parts of the Conservative party. [ABSTRACT FROM AUTHOR]

Last month saw the publication of the National Skills Task force's final report. The report outlined shortcomings in the UK's vocational education and training (VET) performance. It advocated a number of measures to boost the supply of skilled and educated labour. This follows numerous pronouncements from the present and previous administrations in similar vein. Terms like 'the learning society' and 'the learning organisation' have become common currency. The ESRC Research Centre on Skills, Knowledge and Organisational Performance is investigating the complex issues involving skills and economic performance. Directed by Ken Mayhew and based at the Universities of Oxford and Warwick, one strand of its research is to investigate the possibility that an important source of the UK's VET failings is the lack of demand for skills by employers, and that this at least as important as shortcomings on the supply side. This article by Ewart Keep expands on this theme. [ABSTRACT FROM AUTHOR]

▀ The coronavirus lockdown caused UK savings to surge. We think the household saving ratio will average over 15% in 2020 ‐ almost twice its long‐run average ‐ while the corporate sector is likely to run a hefty financial surplus.▀ Evidence suggests that economic shocks usually push up the desire to save, to the detriment of growth. But the uniqueness of the Covid crisis and its aftereffects could limit the extent of the private sector's increased prudence.▀ Scarred by recent events, consumers may remain thriftier as normality returns. But the short duration of the economic contraction and the windfall nature of lockdown savings mean any long‐term rise in savings rates could be modest.▀ Meanwhile, post‐pandemic, a more cautious attitude to investment and efforts to repair balance sheets suggest higher saving by firms. But the prospect of weak corporate profit growth will, in our view, offset those forces. [ABSTRACT FROM AUTHOR]

▀ We expect the UK and EU to agree an FTA that will take effect on 1 January 2021, two years earlier than we had previously assumed. The earlier introduction of trade barriers will dampen the post‐coronavirus recovery.▀ The economic case for delaying the implementation seemed to have been strengthened by the pandemic, which has left firms and the government ill‐equipped to adapt. But political considerations have won out.▀ We think a basic trade deal is more likely than not. The terms of the withdrawal agreement mean that failure to agree an FTA would increase frictions on trade between GB and NI. The UK will also be keen to protect vulnerable sectors. [ABSTRACT FROM AUTHOR]

▀ Economic crises are often turning points, and the upheaval triggered by coronavirus may prove one of them. A permanently bigger state and public borrowing, persistently cowed consumers, a more 'national' UK economy and the impetus for beneficial reforms are all possibilities.▀ We think the scale of state intervention in the economy to protect public health will increase pressure to do more in aid of other social goals. The austere 'Treasury view' of deficits is also likely to wane.▀ Meanwhile, evidence suggests that major economic shocks can exert a decades‐long drag on consumers' desire to spend, giving another reason why higher government borrowing may persist long after the pandemic has faded.▀ Supply‐chain vulnerabilities exposed by the virus may crystallise the more 'UK‐first' approach to economic policy that Brexit ushered in. Although greater protectionism could threaten economic dynamism, the crisis could be the stimulus to structural reform, offering a potential growth upside [ABSTRACT FROM AUTHOR]

▀ UK households are wealthier than ever, thanks to continued growth in house prices and a buoyant stock market. However, the nature and distribution of that wealth means that support for consumer spending from a 'wealth effect' is likely to be both small and less than in the past., ▀ In Q4 2016, households' holdings of owner-occupied property and net holdings of financial assets amounted to £9.2tr, almost 8% up on the level a year earlier. This was equivalent to 719% of annual household gross disposable income, a near-record high., ▀ A long-established feature of economics is the concept of a 'wealth effect' - the premise that faced with rising wealth levels, households feel more comfortable and economically secure and hence spend more. But the economic literature differs on how large this effect is., ▀ Our own Global Model suggests that the wealth effect is modest, with a 10% rise in wealth boosting consumer spending by only around 0.2%. One reason is that about half of financial wealth consists of highly illiquid assets in pension funds. But this component has recently been the biggest source of growth in wealth., ▀ Given differences in the propensity to consume out of income and wealth, the concentration of financial and housing assets among better-off households will also act to neuter the size of any wealth effect. The wealthiest one percent of households hold around 20% of household wealth. But the bottom quartile owns only 1.5%., ▀ Meanwhile, the housing market has created an ever-greater concentration of wealth. The share of households owning their own property fell from 71% to 63% in the decade to 2015. But the share of private renters more than doubled in the same period, from 9% to just over 19%. And the pre-crisis appetite to finance consumption by borrowing against the value of property shows no sign of returning. [ABSTRACT FROM AUTHOR]

Rapid expansion of the labour supply and robust business investment means that potential output is likely to have grown strongly last year. Therefore, based upon the latest data for GDP, we estimate that the output gap only narrowed very slightly in 2014, ending the year at 4% of potential output., The prospects for potential output growth are favourable, with the labour supply set to be boosted by sustained strength in inward migration and the staged increase in the State Pension Age, and robust growth in business investment continuing to deepen the capital stock., This will provide the conditions for relatively strong growth and low inflation over the medium term, with GDP growth expected to average 2.6% a year from 2015-19. This is some way below the average of the decade prior to the financial crisis, but it would represent a clear step up on the average growth rate achieved between 2007-14., Our estimate of the output gap is much larger than that of the OBR. This suggests that the UK's structural deficit is smaller and that the degree to which fiscal policy needs to be tightened may not be as great as the OBR estimates. [ABSTRACT FROM AUTHOR]

The question of the size of the output gap is crucially important to both fiscal and monetary policy. UK GDP ended 2013 around 1¼% below its pre-crisis peak and were we to assume that potential output has continued to grow at historic rates since the financial crisis, this would suggest an output gap of 15% of potential GDP. However, it appears likely that the financial crisis has inflicted some structural damage to potential output which will never be reclaimed, implying a smaller output gap... [ABSTRACT FROM AUTHOR]

The article discusses the weak recovery of the British economy. The gross domestic product (GDP) remains around 3% and the financial crisis is said to have caused a damage to possible output. Factors which damaged demand and weakened GDP growth include the fiscal consolidation programme, tight credit conditions and sovereign debt crisis. Particular focus is given to the gap between GDP and potential output and stronger activity implied by labour market data.

The article discusses how the financial crisis affected the output growth in Great Britain from 2007-2011 and offers long-term economic outlook for the country for the next five years from 2012. It analyzes the sources of potential output loss since 2007 which included the collapse in business investment and the increase in unemployment. Forecasts on labor supply, total factor productivity and output gap are also explained.

The article presents an outlook for mortgage possessions rates in Great Britain for 2012-2015. Information on the main economic drivers of these rates is given. It expects the number of mortgages to increase quarterly at a rate of 0.1%. Also expected is a rise in the forbearance policy indicator in the second quarter of 2012. During the first-third quarter of 2012, the mortgage rate is projected to increase by 17 basis points while unemployment will drop by 6.9% in the last quarter of 2015.

The article summarizes the economic outlook for Great Britain in 2012. Based on data gathered from the labor market, output gap in the country is estimated at around negative 3.2 percent of potential output at the end of 2011. Experts are predicting that employment prospects will deteriorate further in 2012, which will result in lessening the attractiveness of the country for migrant labor. The regional financial crisis is also said to have a significant impact on business investment funding.

The article presents an economic outlook for Great Britain, particularly the impact of public spending cut on the labor market. The labor market showed resilience during the recession but indicators show that the market has become affected, with private sector hiring remaining low. Unemployment may increase given the combination of falling public sector unemployment and minimal job creation.

The article discusses an economic outlook for Great Britain to 2015, particularly regional mortgage repossessions. Factors that influence mortgage possessions rates include debt service ratio, unemployment rate and access to refinancing opportunities. It is predicted that there would be a small upturn in possessions order due to low house prices in 2011 and withdrawal of income support.

This article provides an outlook for trends in the British economy in 2010 and 2011. It expects the government's fiscal tightening to affect the economy. It expects consumer spending to grow in 2011. The article also sees a risk of higher levels of unemployment due to reforms to the benefit system. A further drop in living standards is also noted.

The article discusses the fiscal tightening measures being implemented by the government of Great Britain and how it can affect overall economic growth. The fiscal retrenchment, initiated by British Chancellor George Osborne in June 2010, aimed to eliminate the structural budget deficit while protecting economic recovery. A comparison to the Canadian experience in the mid-1990s describing how government spending cuts can lead to economic recovery is presented.

The article presents a long-term growth outlook for Great Britain. It states that there was a potential output growth due to several factors such as net inflows of migrants, a decrease in the non-accelerating inflation rate of unemployment (NAIRU), and shift to high value-added sectors. It notes the existence of a link between demand shifts and NAIRU changes via hysteresis, profile changes in age affecting a potential output growth, and growth from capital stock expansion.

We have lowered our forecast for UK economic growth following the vote to leave the EU on 23 June. GDP growth is now forecast at 1.1% in 2017 and 1.4% in 2018, and the medium-term outlook has also been nudged down. We have also lowered our forecast for all of the main industrial sectors, with the biggest reductions in the long-term forecasts for construction and manufacturing, although the weak pound could provide some short-term boost to the latter., Our baseline forecast assumes that the government triggers Article 50 by the end of this year and that the UK leaves the EU by end-2018. We assume that the government draws a red line under the freedom of movement and thus loses access to the single market. Trade relations revert to WTO rules., A number of factors determine the relative impact on each sector. First, in the short term, heightened uncertainty will hit business confidence, causing firms to delay capital spending. Second, less favourable trade relations with the EU could see export-oriented sectors migrate production away from the UK. Finally, restrictions on migration will reduce the potential size of the labour force., Consequently, investment-oriented sectors such as construction and machinery have seen some of the largest downgrades. Moreover, transport equipment is heavily exported to Europe, so increased trade barriers could see some production move out of the UK. Meanwhile, labour shortages could weaken growth prospects in labour-dependent sectors. In addition, the vote has created uncertainties around the long-term viability of London as Europe's major financial centre., The outlook for more consumer-focused sectors is less downbeat, although an uptick in inflation may erode household purchasing power in the near-term, and the multipliers from lower economic activity are likely to permanently reduce household incomes in the long term relative to our last baseline [ABSTRACT FROM AUTHOR]

This section presents the findings of the research conducted by Oxford Economics and John Muellbauer of Nuffield College with the European Commission. It shows the importance of real income growth relative to housing supply and the user coast of housing and credit market to the determination of real house prices. Unemployment is cited as an indicator for the housing industry in some countries such as Great Britain and Ireland. The research points out the need for a research focused on direct measurement and endogenization of credit market conditions.

The article examines whether recession will bring about a rebalancing of the economy of Great Britain. It cites the roots of the current world financial crisis and deep recession. It discourages the government from imposing tighter regulation or higher taxation. It predicts that high value-added manufacturing are likely to be the main growth areas.

The article examines why home foreclosures in the U.S. are so high. An estimated 13% of U.S. mortgages are either in arrears or in foreclosure. Housing collapse in the U.S. began earlier than that in Great Britain. It discusses the rise in subprime delinquencies. It investigates the impact of the rise in delinquencies and foreclosures on the health of the U.S. banking system.

The article discusses the role of quantitative easing (QE) in pulling Great Britain out of recession. It states that the policy of QE aims to boost the money supply and bring down key borrowing costs in order to counter the recession and the risk of getting into deflation. According to the article, QE has been implemented because conventional monetary policy approaches could no longer be used. It is inferred that despite the introduction of this policy, a rapid recovery in the country's real economy is not expected.

The article presents an outlook for the world economy as of October 2008. The impending global recession has prompted governments to intervene, including the decision of the U.S. to buy bad assets and the £700 billion bank recapitalisation scheme in Great Britain. Several charts are also presented that show economic forecasts for several regions, such as the Eurozone, Japan, and France. An assessment of the economic conditions and gross domestic product (GDP) forecast in emerging markets is also presented.

The article offers an economic outlook for Great Britain. "Inflation Report" from the Bank of England warns that the risks to inflation in the medium term were on the upside. It is expected that the bank rate would increase to 6%. Meanwhile, consumer price inflation has declined, which reflects the impact of increases in utility prices and cuts in gas and electricity prices. It is estimated that the gross domestic product has risen 0.8%, which is led by the financial and business services and transport and communications sectors.

Presents forecasts on the economic recovery and growth in Great Britain through 2006. Performance of gross national product in the third quarter of 2003; Comparison of growth in the U.S. and in Britain in the 1990s; Level of demand for exports in continental Europe.

House prices are rarely out of the headlines in the UK and continue to be a national obsession. But, for an asset that is so important in household portfolios, regrettably, the standard of economic analysis is often extremely poor, ignoring even the most basic economic theory and empirical evidence. In this article, Geoff Meen assesses the dangers of a collapse in house prices. A more dispassionate look at the evidence suggests that, at the national level, there is little evidence of a serious problem. This remains the case when we move to the regional level. However, we would suggest, on the basis of preliminary evidence, that certain areas of London could be over-valued. If any market is to decline, this would be our first bet. But it does not follow that the rest of the country will also decline. [ABSTRACT FROM AUTHOR]

Entry to EMU at an inappropriate exchange rate could trigger a full-blown business cycle in the UK. Once inside EMU, the UK’s response to a number of different economic shocks would change — partly because of the fixed exchange rate, and partly because of the common monetary policy. In particular, when an asymmetric shock occurs — one that hits the UK harder than other Eurozone economies — the UK response is generally likely to be more pronounced inside EMU than outside. We find that that result still applies even in a reformed EMU — one in which the ECB and the labour market are reformed to bring them closer to the Anglo–Saxon model. [ABSTRACT FROM AUTHOR]

The issue of incomplete pass-through from exchange rate changes to domestic inflation has received considerable attention. Most models try to account for this by using a variety of assumptions about the costs of changing prices. These suggest complete pass-through, but only after the possible elapse of a considerable delay. In contrast, in this article Graeme Chamberlin and Brian Henry provide evidence that exchange rate effects on inflation may be non-linear and, more specifically, subject to thresholds. Their tentative results suggest this may be important in describing price-setting behaviour in the UK. [ABSTRACT FROM AUTHOR]

Assesses recessions in the United Kingdom since 1970s. Forecast on gross domestic product; Anatomy of previous recessions; Causes of previous recessions; Risks for 2002.

In this article, Simon Price argues that the government is pursuing a remarkably conservative fiscal policy. Not only has demand management been left almost entirely to the MPC, but since 1997 spending has been held down while the overall tax burden has been raised. Consequently, the relative size of the national debt is declining at a rapid rate. There are rules that are intended to govern debt policy, but they are based on less sound principles than the government argues, and may be inconsistent. Oddly, despite the emphasis on these rules, the government has announced a path for spending that makes it clear that it is in fact planning not to follow them. The government may be planning to reduce the national debt at an excessive rate. This may make sense in the short run, but is more problematic in the medium to long term. This is not to say fiscal policy should be immediately relaxed; the current low levels of private sector saving may well justify a temporarily tight fiscal stance. [ABSTRACT FROM AUTHOR]

Focuses on the economic conditions of Great Britain as of October 1999. Increase in interest rates; Rate of inflation in September 1999; Percentage of increase in gross domestic product for the second quarter of 1999.

In this article, Stephen Hall, Brian Henry and James Nixon review the arguments that granting a central bank independence to set monetary policy leads to low inflation. An important extension to the standard analysis considers the problem which may arise if monetary and fiscal policy are then not co-ordinated. A strategic analysis is needed to assess this. Using such a framework in an empirical analysis, the authors find that an uncoordinated policy may lead to less growth than a co-ordinated policy, and the main effects of this lack of co-ordination are an overvalued exchange rate and a reduction in net trade. [ABSTRACT FROM AUTHOR]

Activity in the UK housing market has been surprisingly weak over the last couple of years, particularly given the very cheap, fixed-rate mortgage deals that are now available. In this article, Geoff Meen asks why the number of transactions has been so low and looks at future prospects for the housing market. [ABSTRACT FROM AUTHOR]

In this article Francis Breedon discusses how sterling's rise over the last 6 months can be explained in terms of a delayed overshooting reaction to past monetary policy. Although the timing is still hard to judge, it seems that this effect should now begin to wear off, allowing sterling to fall - particularly against the DM. As far as future monetary policy is concerned, this delayed overshoot is another argument for the Treasury and Bank of England undertaking a more activist exchange rate policy, perhaps following the example of another open economy on the fringes of EMU - Switzerland. [ABSTRACT FROM AUTHOR]

Sterling has now appreciated by over 25% since the second half of 1996. A key issue affecting the UK economy is the extent to which this will reduce growth this year and in 1999. When can we expect to see the net trade position deteriorate and to what extent? In this article, Paul Robson and James Nixon argue that business survey evidence implies that the current strength of Sterling is likely to lead to falling manufacturing exports over the course of this year. This combined with increased import penetration should be sufficient to cool the economy and remove the need for a further interest rate rise. [ABSTRACT FROM AUTHOR]

In this article James Nixon urges the Monetary Policy Committee to pay attention to the longer term fundamentals driving the UK economy when setting interest rates. While current demand pressures may produce an inflationary 'blip', too myopic a focus on the UK's short term prospects may prompt a significant slowdown in 1998. This in turn would spell an unnecessary increase in unemployment, curtailed investment plans and a reduction in the economy's future growth prospects. [ABSTRACT FROM AUTHOR]

Provides an assessment of the outlook for consumer spending in the wake of the boost being provided by consumer "windfalls," drawing on research being carried out under the macroeconomic modelling program of the Center for Economic Forecasting. Trends in consumers' expenditure and retail sales volumes from 1990 to 1997; Status of inflation and average earnings from 1992 to 1997; Measures of financial liberalization.

The article reports on the economic performance of Great Britain. The downward revision of gross domestic product (GDP) growth by 0.1 percent in the first and second quarter of 2011 indicates a smaller economy than that in the third quarter of 2010, and although business confidence has decreased, consumer confidence has stabilised in September. The article states that although unemployment will increase, the economy is expected to gradually recover and consumer spending will improve in 2012.

The article forecasts the economic condition of Great Britain in 2009. The gross domestic product (GDP) of Great Britain is expected to contract at 1% in the first quarter of 2009. With anticipated cutting of labor forces and some high-profile corporate failures, the International Labour Organization (ILO) measure of unemployment is foreseen to be more than 3 million in 2010. Despite the signs showing that the banking sector is stabilizing, bank lending is considered frozen. Consumers are expected to have their savings ratio grow to nearly 6% over the next two years from 1.8% in the third quarter of 2008.