How Have World Shocks Affected the UK Economy?

13 Pages Posted: 10 Jul 2014

Date Written: June 16, 2014

Abstract

The UK economy is closely integrated into the wider global economy. These ties mean that global developments affect the economic fortunes of the United Kingdom. This article presents model-based estimates which suggest that world shocks have driven around two thirds of the weakness in UK output since 2007. Trade linkages are an important channel for the transmission of world shocks to the UK economy. But financial linkages and spillovers through uncertainty are significant, too — and together are likely to account for the majority of the impact of world shocks on the United Kingdom since 2007.

Suggested Citation

Chowla, Shiv and Quaglietti, Lucia and Rachel, Lukasz, How Have World Shocks Affected the UK Economy? (June 16, 2014). Bank of England Quarterly Bulletin 2014 Q2, Available at SSRN: https://ssrn.com/abstract=2464076

Shiv Chowla (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Lucia Quaglietti

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Lukasz Rachel

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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