Danny Walker, Dong Lou, Gabor Pinter and Semih Üslü Government bond yields tend to drift higher in the days before monetary policy or data news in the UK. Over the past two decades this tendency – which we label ‘pre-news drift’ – has pushed up on yields by 2 percentage points in total over that … Continue reading Why do government bond yields drift when news is on its way?
interest rates
Rishi Khiroya and Lydia Henning If you asked people what skill they would most love to have, you might receive answers like ‘to fly’, ‘to be invisible’ or even ‘predicting the future’. If you asked people who worked in financial markets in particular, ‘accurately predicting the future’ would probably be top of the list. From … Continue reading Fossicking in the dark or twenty-twenty foresight?
Krishan Shah, Phil Bunn and Marko Melolinna An important way in which monetary policy impacts the economy is through its effects on the capital expenditure of firms. When policy rates are raised (and as long as risk-premia remain unchanged) firms’ cost of capital increases. A higher cost of capital should lead firms to increase their … Continue reading High hurdles: evidence on corporate investment hurdle rates in the UK
Nuri Khayal and Jonathan Loke Many households in the UK have seen their mortgage payments go up since mortgage rates started to increase in 2022. In the current environment of higher rates, the question of how much a household can comfortably spend on their mortgage payments before getting into financial distress is particularly relevant. This … Continue reading The link between mortgage debt servicing burdens and arrears: is there a critical threshold?
Laura Achiro and Neha Bora Central banks in most advanced economies have tightened monetary policy by raising interest rates. Tighter financing conditions may make it harder for some businesses to refinance their debt or could mean they face less favourable terms when they do. This blog explores the extent to which bond maturities could crystallise … Continue reading How resilient are UK corporate bond issuers to refinancing risks?
The UnOz’s Person of the Year award is one of the most anticipated events of the year, with defamation lawyers everywhere especially keen to see the list. 2023 was a year like no other. For Australia it felt like a... Read More ›
The Reserve Bank of Australia has taken a break from kicking mortgage holders in the groin to call on the Nation’s defamation lawyers to reign in their spending as inflation is on the rise. ”These millionaire defamation lawyers need to... Read More ›
Fergus Cumming and Danny Walker Bank Rate has risen by more than 5 percentage points in the UK over the past couple of years. This has led to much higher mortgage rates for many people. In this post we analyse another potential source of pressure on mortgagors: the potential for falls in house prices to … Continue reading Why lower house prices could lead to higher mortgage rates
The Nation’s banks have called on the Albanese Government to relax the laws around selling human organs in order to allow people to afford the latest interest rate rise. ”The Government needs to do all it can to allow us... Read More ›