Bank of England Research

In today’s Bank Underground post, Philippe Bracke (BoE), Matt Everitt (BoE), Martina Fazio (BoE) and Alexandra Varadi (BoE) explore how UK mortgagors adjusted their spending patterns during the period of interest rate increases that began in late 2021. 🔗 bankunderground.co.uk/2025/07/24/w...

The series aim to:
🔹 Support continuous learning and improvements
🔹 Encourage external engagement and debate
🔹 Improve transparency around the models we use (3/3)

The MTP Series is a key step in our response to Dr. Ben Bernanke’s 2024 review of the Bank’s monetary policy processes. (2/3)

A structural VAR model for the UK economy Part of the Macro Technical Paper series designed to document models, analysis and conceptual frameworks for monetary policy preparation – they are written by Bank staff to encourage feedback and fost...

🧵 We recently published our third Macro Technical Paper (MPT) by David Brignone (BoE) and Michele Piffer (BoE), which outlines a structural VAR model for the UK economy.

📖 Read here: www.bankofengland.co.uk/macro-techni... 1/3

'Muddling through or tunnelling through?’ UK monetary and fiscal exceptionalism and the Great Inflation Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Staff Working Paper 1135 by Michael Bordo (Rutgers), Oliver Bush (BoE) & Ryland Thomas (BoE) reconsiders the historical & empirical record of inflation in the UK to determine the underlying causes of the Great Inflation of the 1960s & 1970s.
🔗 www.bankofengland.co.uk/working-pape...

In today’s Bank Underground post, Charlie Warburton (Cambridge) and James Brookes (BoE) develop a new set of readability metrics, and revisit the relationship between central bank communication readability and market volatility. 🔗 Read the post here: bankunderground.co.uk/2025/07/17/m...

The real economy effects of QE through the corporate bond market Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Staff Working Paper 1134 by Mahmoud Fatouh (BoE), Simone Giansante (Palermo) & Meryem Duygun (Nottingham), examines the real economy impact of the Bank of England’s QE operations through the corporate bonds market between 2009 and 2021. 🔗 Read here: www.bankofengland.co.uk/working-pape...

In today’s Bank Underground post, Hannah Copeland (BoE), Lennart Brandt (BoE), Natalie Burr (BoE) and Boromeus Wanengkirtyo (BoE) examine the impact of a tighter carbon pricing regime on UK energy prices and inflation. 🔗 Read the post here: bankunderground.co.uk/2025/07/08/w...

🏆 This research was previously released as a Bank of England Staff Working Paper, and published in the Journal of Financial Economics in 2024. This research was previously released as a BoE working paper & published in the JFE in 2024. (2/2)

Refinancing cross-subsidies in the mortgage market In household finance markets, inactive households can implicitly cross-subsidize active households who promptly respond to financial incentives. We as…

🎉We’re delighted to share that the paper “Refinancing Cross-subsidies in the UK Mortgage Market” has won the first-place Jensen Prize. Congratulations to the authors J Fisher (Virginia), A Gavazza (LSE), L Liu (Wharton), T Ramadorai (Imperial) & J Tripathy (BoE) www.sciencedirect.com/science/arti...

When the fog clears: the effect of reduced inflation uncertainty on households' financial behaviour Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Staff Working Paper 1133 by Johannes Fischer (Bundesbank), Christoph Herler (BoE) and Philip Schnattinger (BoE) examines the effects of inflation uncertainty on households’ consumption and saving decisions. 🔗 Read the paper here: www.bankofengland.co.uk/working-pape...

In today’s Bank Underground post, Julia Giese (BoE) and Jacqueline Koay (BoE) discuss how scenario planning can be adopted by policymakers to navigate uncertainty and unpredictable events. 🔗 Read the post here: bankunderground.co.uk/2025/07/03/o...

Financial frictions and firms’ capital composition: a structural estimation of firms’ borrowing constraints for the UK Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Staff Working Paper 1132 by Sara Holttinen (Oxford), Marko Melolinna (FCA) and Marin Froemel (BoE) examines how intangible assets affect a firm’s ability to obtain external debt financing. 🔗 Read the paper here: www.bankofengland.co.uk/working-pape...

How fixed are global exchange rates? Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Read the companion Staff Working Paper here: www.bankofengland.co.uk/working-pape...

In our latest BU post, Roger Vicquéry (BoE) & Kevin Hjortshøj (Sciences Po) outline a new global index to measure how fixed the world’s exchange rates are. The index measures the probability that two units of GDP are involved in a fixed FX arrangement. 🔗 bankunderground.co.uk/2025/06/26/h...

Nowcasting GDP at the Bank of England: a Staggered-Combination MIDAS approach Part of the Macro Technical Paper series designed to document models, analysis and conceptual frameworks for monetary policy preparation – they are written by Bank staff to encourage feedback and fost...

🔹 MTP 2: Nowcasting GDP at the Bank of England: A Staggered-Combination MIDAS Approach
🖋️ Andre Moreira
📖 Read here: www.bankofengland.co.uk/macro-techni... 3/3

Decompositions, forecasts and scenarios from an estimated DSGE model for the UK economy Part of the Macro Technical Paper series designed to document models, analysis and conceptual frameworks for monetary policy preparation – they are written by Bank staff to encourage feedback and fost...

🔹 MTP 1: Decompositions, Forecasts and Scenarios from an Estimated DSGE Model for the UK Economy
🖋️ Daniel Albuquerque, Jenny Chan, Derrick Kanngiesser, David Latto, Simon Lloyd, Sumer Singh, and Jan Žáček
📖 Read here: www.bankofengland.co.uk/macro-techni... 2/3

Decompositions, forecasts and scenarios from an estimated DSGE model for the UK economy Part of the Macro Technical Paper series designed to document models, analysis and conceptual frameworks for monetary policy preparation – they are written by Bank staff to encourage feedback and fost...

🧵We’re excited to launch the Macro Technical Paper (MTP) Series—a key step in our response to Dr. Ben Bernanke’s 2024 review of the Bank’s monetary policy processes. Links to the first two MTPs are in the comments. 1/3

Intertemporal pass-through Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Staff Working Paper 1130 by Mishel Ghassibe (UPF/BSE), Boromeus Wanengkirtyo (BoE) & Ivan Yotzov (BoE) examines whether firms engage in “intertemporal pass-through”, where their desired prices respond to changes in expected future marginal costs. 🔗 www.bankofengland.co.uk/working-pape...

🎉 We’re delighted to share that Misa Tanaka, Head of Research at the Bank of England, has been appointed the next UK WEN Chair. Congratulations, Misa! 👏

📢 We’re hiring two Research Economist in the Current Economic Conditions Division, Bank of England

📍 Location: London or Leeds
📅 Apply by: 4 July 2025
🔗 Full details: eoff.fa.em1.ukg.oraclecloud.com/hcmUI/Candid...

Modelling income risk dynamics in the UK: a parametric approach Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Staff Working Paper 1129 by Marco D’Amico (Uppsala) and Martina Fazio (BoE) uses nearly 50 years of administrative-quality data to study how business cycle fluctuations affect the distribution of labour income growth. 🔗 Read the paper here: www.bankofengland.co.uk/working-pape...

The positive neutral countercyclical capital buffer Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Staff Working Paper 1124 by Manuel Muñoz (BoE) and Frank Smets (BIS) develops a quantitative macro-banking model to explore how countercyclical capital buffers should be optimally managed over the business cycle. 🔗 Read the paper here: www.bankofengland.co.uk/working-pape...

In our latest Bank Underground post, Jamie Waddell (BoE) and Danny Walker (BoE) examine whether an increase in mortgage supply causes a change in UK home ownership. 🔗 Read the post here: bankunderground.co.uk/2025/06/05/m...

Agent-Based Modelling for Policy (ABM4Policy) workshop The European Central Bank (ECB) is the central bank of the European Union countries which have adopted the euro. Our main task is to maintain price stability in the euro area and so preserve the purch...

📣 📣 📣 Registrations are now open for the 4th “ABM4Policy” Agent-Based Modelling for Policy workshop, co-organised by the ECB, BoE and others.

📆 26-27 June 2025 📍 ECB, Frankfurt am Main

Register here: www.ecb.europa.eu/press/confer...

Unlocking New Methods to Estimate Country‐Specific Effects and Trade Elasticities With the Structural Gravity Model We propose new methods to identify the impact of country-specific characteristics, policies, and trade costs on bilateral trade flows within the structural gravity framework. We complement theory wit....

👀 New paper alert!
📄 “Unlocking New Methods to Estimate Country-Specific Effects & Trade Elasticities With the Structural Gravity Model”
🖋️ By Freeman (BoE), Larch (Bayreuth), Theodorakopoulos (Aston) & Yotov (Drexel)
🧠 Just out in J. Applied Econometrics!
🔗 onlinelibrary.wiley.com/doi/10.1002/...

CCBS Conference: Transforming monetary policy – How should we think about uncertainty and risks? Hybrid: 25 – 26 June 2025

📣 📣 📣 Registrations are now open for the BoE’s Centre for Central Banking Studies conference “Transforming monetary policy – How should we think about uncertainty and risks?”

📆 25-26 June 2025 📍 A hybrid event at Bank of England

Register here: www.bankofengland.co.uk/events/2025/...

In our latest Bank Underground post, Miruna-Daniela Ivan (BoE) draws on the Bank of England’s Sterling Money Market Data to explore the extent of collateral re-use in the gilt repo market. 🔗 Read the post here: bankunderground.co.uk/2025/05/29/c...

Improving text classification: logistic regression makes small LLMs strong and explainable ‘tens-of-shot’ classifiers Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Staff Working Paper 1127 by Marcus Buckmann (BoE) and Ed Hill (BoE) outlines a simple method using small open-source generative language models to conduct text classification on a laptop that can outperform larger commercial models.
🔗 Read the paper here: www.bankofengland.co.uk/working-pape...

In our latest Bank Underground post, Simon Whitaker (BoE) examines the impact of the digitalisation of finance on international capital flows. 🔗 Read the post here: bankunderground.co.uk/2025/05/22/c...