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- Title
Markets and operations.
- Abstract
This article reviews developments since the Spring Quarterly Bulletin in sterling financial markets, UK market structure and the Bank's official operations. * Volatility picked up in a number of asset markets towards the end of the period. In particular, emerging market asset prices and some commodity prices fell sharply. This seemed to reflect an adjustment in investors' perceptions of risk, at least in these markets. * There was a more moderate pickup in volatility in sterling interest rate markets. Short-term nominal sterling interest rates rose over the period as a whole. * Long-term nominal sterling rates also increased, on account of higher real rates and a pickup in inflation expectations and/or inflation risk premia. The rise in real rates was common across currencies. * Despite higher interest rates and lower equity prices, corporate bond spreads did not widen much. * The Bank implemented fundamental reforms to modernise its operations in the sterling money markets.
- Subjects
UNITED Kingdom; MONEY market; FINANCE; FINANCIAL markets; POUND sterling; MARKET volatility; INTEREST rates; INFLATION risk; HARD currencies; FOREIGN exchange; PRICES
- Publication
Bank of England Quarterly Bulletin, 2006, Vol 46, Issue 2, p125
- ISSN
0005-5166
- Publication type
Article