The U.K. and the Flow of Funds involving: the Bank of England, U.K. households and the U.K. Government

De Koning, Kees (2023): The U.K. and the Flow of Funds involving: the Bank of England, U.K. households and the U.K. Government.

Abstract

In the U.K.,like in other countries, households have usually two main savings objectives: Buying a home and saving for a pension. Both are long term commitments. When the Bank of England increases its base rates, households are often forced to limit ordinary expenses in order to give priority to serving the two savings objectives. Their is another solution: using existing savings levels in home equity. The Bank of England could create a funding scheme "QE Home Equity" which could help households to overcome the cost of living crisis and thereby maintain economic growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Fund flows from households into savings for pensions and home equity. Bank of England support.
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit

References

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https://www.ons.gov.uk/economy/investmentspensionsandtrusts/articles/ukpensionsurveys/redevelopmentand2019results

2. Savills: Home values in the U.K https://www.bing.com/search?q=Savils+housing+stock+values+in+the+U.K&form=MSNSB1&refig=ff97e4ebb3dc408cada0d14d83fd2894&mkt=en-gb

3.”Finders” Outstanding mortgage obligations in the U.K https://www.finder.com/uk/mortgage-statistics

4.U.K. Office of National Statistics; Inflation and Prices https://www.ons.gov.uk/economy/inflationandpriceindices

5.Federal Reserve of St. Louis; Households owners’ equity in real estate. https://fred.stlouisfed.org/series/OEHRENWBSHNO

6.U.K. Office for National Statistics; Average house prices and inflation levels. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/october2022

7.The Times: Millions halt their pension to pay their bills. https://www.thetimes.co.uk/article/03a2c39e-86dc-11ed-bb21-8f4d97ec7b02?shareToken=36f6b0b9354b22272d30ad0190ddea59

8. Bank of England; the bank rates. https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate

9.U.K Office of National Statistics; Inflation and Price indices; Time Series https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l55o/mm23

10.U.K Resolution Foundation; New years outlook. 2023 https://www.resolutionfoundation.org/publications/new-years-outlook-2023/

11.The Times: House prices set to slump in 2023 https://www.thetimes.co.uk/article/house-prices-set-to-slump-during-2023-8rkvf7ztw