The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This Selected Issues paper analyzes the impact of globalization on United Kingdom's inflation and relative prices over the last decade. The IMF's Global Economy Model (GEM) is used to estimate the relative importance of the various factors argued to have influenced the evolution of inflation and relative prices over this period. The key result is the significantly different impact of the shock on relative prices in the United Kingdom compared with the United States and the Euro area.