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- Title
London, money and the UK economy.
- Abstract
In this speech,Sir John Gieve, Deputy Governor for financial stability, discusses the impact of London's growth as an international financial centre, the effect of financial innovation on the interpretation of economic data, and the significance of the growth in money and credit for the economy. He argues that internationalisation, IT and the growing role of capital markets favour the clustering of financial activity so we should expect London to continue to grow in the long term relative to the financial industry worldwide and to the rest of the UK economy. He notes that the growth of the City and the new financial markets is making the interpretation of some of the core statistics used to monitor the economy more difficult because of the growing importance of bonuses, the difficulty of measuring the output of financial firms, and the impact of the growth in structured finance on monetary growth. After allowing for these effects, he concludes that there have been shifts in the supply of money and credit in recent years and explains that he voted for a further increase in the Bank Rate in June partly because he was not convinced that current rates would be sufficient to bring credit growth and nominal demand back to their long-term sustainable path.
- Subjects
UNITED Kingdom; URBAN growth; SPEECHES, addresses, etc.; GLOBALIZATION; CAPITAL market; GIEVE, John; ECONOMIC conditions in Great Britain
- Publication
Bank of England Quarterly Bulletin, 2007, Vol 47, Issue 3, p428
- ISSN
0005-5166
- Publication type
Article