## United Kingdom: Selected Issues

_IMF Staff Country Reports, July 8, 2024_

## Source details

**Canonical URL:** [United Kingdom: Selected Issues](https://www.imf.org/en/publications/cr/issues/2024/07/03/united-kingdom-selected-issues-551380)

## Other formats

- [Markdown version](/en/publications/cr/issues/2024/07/03/united-kingdom-selected-issues-551380/index.md)
- [Structured JSON version](/en/publications/cr/issues/2024/07/03/united-kingdom-selected-issues-551380/index.json)
- [Bundle manifest](/en/publications/cr/issues/2024/07/03/united-kingdom-selected-issues-551380/bundle-manifest.json)

## Bibliographic details
- Published: July 8, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400281426.002

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### Executive summary
- Analyses monetary policy issues in the UK, examining key macro and financial indicators and assessing the effects of the tightening thus far.
- Finds that monetary transmission has largely mirrored previous episodes, with the most notable exception of the mortgage channel, which has been slower due to a higher share of fixed-rate mortgages.
- Reveals an outsized impact of federal announcements on UK financial markets and argues that this will place a premium on Bank of England (BoE) communications in a context where the BoE may diverge.
- Concludes that monetary transmission in the UK during the current cycle has mostly worked as expected and has been similar to the experiences in other advanced economies.

### Key findings on transmission and spillovers
- Monetary transmission in the current cycle has mostly worked as expected and resembles experiences in other advanced economies.
- Mortgage channel:
  - Slower transmission due to a higher share of fixed-rate mortgages.
- Federal (Federal Open Market Committee) spillovers:
  - Federal announcements have an outsized impact on UK financial markets.
  - Results indicate that Federal Open Market Committee spillovers do have a sizable effect on monetary transmission in the UK.
- Identification approach:
  - Monetary policy surprises identified through changes in high-frequency market indicators within a narrow window around monetary policy announcement.

### Policy implications and emphasis
- The outsized impact of federal announcements implies a premium on Bank of England (BoE) communications, particularly in situations where the BoE may diverge from Federal Reserve policy.
- Communication strategy:
  - Enhanced BoE communications are implied to be important given foreign policy spillovers and the potential for divergence.

### Subjects and keywords
- Subject: Education, Education spending, Expenditure, Housing, Inflation, National accounts, Prices
- Keywords: Education spending, Fed Policy spillover, Global, Housing, Inflation, MPC decision, spending scenario, UK construction, UK workforce, visa regime

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## Content in this bundle

- **United Kingdom: Selected Issues; IMF Country Report No. 24/204; June 14, 2024**
  - [United Kingdom: Selected Issues; IMF Country Report No. 24/204; June 14, 2024 (Markdown version)](/-/media/files/publications/cr/2024/english/1gbrea2024002.pdf.md){rel="alternate" type="text/markdown"}
  - [United Kingdom: Selected Issues; IMF Country Report No. 24/204; June 14, 2024 (PDF)](/-/media/files/publications/cr/2024/english/1gbrea2024002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2024/07/03/united-kingdom-selected-issues-551380_