TITLE

What accounts for the fail in UK ten-year government bond yields?

AUTHOR(S)
Guimarães, Rodrigo
PUB. DATE
August 2012
SOURCE
Bank of England Quarterly Bulletin;2012 3rd Quarter, Vol. 52 Issue 3, p213
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Financial market measures of future interest rates and inflation rates can provide useful and timely information for policymakers. Recent advances in yield curve modelling have improved the Bank's capacity to extract policy-relevant information from these market measures. Such models suggest that the fall in the yield on UK ten-year nominal government bonds since the onset of the financial crisis largely reflects lower expectations of real interest rates at shorter horizons, consistent with an expectation that policy rates will remain low for some time. The model estimates also indicate that inflation expectations have been relatively stable, and suggest that there are no signs that they have become less well anchored.
ACCESSION #
82152841

 

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