Credit Spreads: Capturing Credit Conditions Facing Households and Firms
11 Pages Posted: 10 Jul 2014
Date Written: June 16, 2014
Changes in credit conditions have been one of the main headwinds affecting the UK recovery since the financial crisis. The likely path of credit spreads is a key determinant of the Monetary Policy Committee’s projections for output and inflation. This article explains how staff at the Bank of England calculate measures of credit spreads which can be used to help inform the Monetary Policy Committee’s central macroeconomic projections.
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