The UK Bank of England - Research Paper Example

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This paper "The UK Bank of England" presents The UK’s Monetary Policy Committee (MPC) is a specialized economic advisory panel whose role is to set short term base interest rates. The MPC sits on a monthly basis to announce revised decisions on interest rates based on a range of economic data…
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The UK Bank of England
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Download file to see previous pages The results show a turbulent exchange rate trend for the period 1992 – 2012. As noted in Figure 1, the lowest exchange rates were observed in 2007; just the same time the global financial crisis started being more pronounced. As shown, it shot to the highest levels ever the subsequent year suggesting that the global financial crisis negatively impacted the exchange rate levels are led to a weaker currency. Figure 2 shows the trend by season.

As shown, Q1 and Q4 have similar trends beginning with a fall in exchange rates and ending with a fall in exchange rates. The results also show that Q2 and Q3 trends are similar as they begin with rising exchange rates and end with rising exchange rates. Overall, each quarter shows a fluctuating trend in the exchange rate for the years observed.
Figure 3 shows the evolution of the FTSE 100 share index since 1992 in the UK. As shown, there has been a general upward trend in the share index since 1992 with slumps in 2002 and 2008. There was an economic recession in 2000 – 2001 that affected the European Union but Britain was unaffected by that recession. It may seem that while it was not directly affected in terms of its impact on GDP, the share index was slightly affected as the index was lowest in 2002 after having an upward rise in the previous years. The index then rose until 2007 when it started falling to another lower level in 2008. This is attributed to the global economic crisis of 2008. The index has since improved.

The trend by season graph shown in Figure 4 reveals a similar cyclical trend of FTSE 100 index for all the four seasons. Thus for all the four quarters, the index begins from a low point and ends at a higher point with two highs and two lows in between them.
The real GDP shown in Figure 5 shows an upward rising real GDP from 1992 – 2012 with a slight fall in 2009 following the global financial crisis of 2008. As shown, it can also be noticed that the economic recession of 2000 – 2001 (Amadeo, 2012) that affected the European Union did not affect the UK as the GDP growth remained stable. ...Download file to see next pagesRead More
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