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- Title
Interpreting long-term forward rates.
- Abstract
The article interprets a chart related to index-linked gilts forward rates as derived from Bank of England's government liability curve. A popular framework for analysing the shape of the forward curve is to assume that forward rates speculate expectations of future short-term interest rates. Hence one interpretation of downward sloping forward curves is that investors in gilts expect future sterling short-term interest rates to be lower in fifty than in ten years' time. It is clear that the nominal and real forward curves are downward sloping.
- Subjects
GOVERNMENT liability; BANK of England; INTEREST rates; INVESTORS; INTEREST rate swaps
- Publication
Bank of England Quarterly Bulletin, 2005, Vol 45, Issue 4, p418
- ISSN
0005-5166
- Publication type
Article