Cover IMF Working Papers
Buy Book in Print
Deciphering Delphic Guidance: The Bank of England and Brexit
Author:
Jagjit Chadha
Search for other papers by Jagjit Chadha in
Current site
Google Scholar Close
,
Corrado Macchiarelli https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Corrado Macchiarelli in
Current site
Google Scholar Close
,
Satyam Goel
Search for other papers by Satyam Goel in
Current site
Google Scholar Close
,
Arno Hantzsche
Search for other papers by Arno Hantzsche in
Current site
Google Scholar Close
, and
Sathya Mellina
Search for other papers by Sathya Mellina in
Current site
Google Scholar Close
Series:
IMF Working Papers
Volume/Issue:
Volume 2024: Issue 160
Language:
English
Publication Date:
19 Jul 2024
DOI:
https://doi.org/10.5089/9798400284649.001
ISBN:
9798400284649
ISSN:
1018-5941
Pages:
43
Keywords:
UK referendum; Brexit; risk premium; monetary policy; central bank communication; text mining; BoE action; BoE strategy; Bank of England MPC communication; BoE's monetary policy; Brexit referendum; Yield curve; Unconventional monetary policies; Central bank policy rate; Sovereign bonds; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (4.5 MB) Download Epub
In response to the 2016 referendum on EU Membership and the ensuing uncertainty as to the eventual consequences of Brexit, the Bank of England (BoE) adopted various methods of influencing market rates, including conventional, unconventional monetary policy measures and communications on forward guidance. To investigate the effectiveness of BoE’s communication, we first decompose long-dated yields into a risk neutral and term premium component. Text-based analysis of Monetary Policy Committee minutes is then used to measure the stance of policy, attitudes to QE and Brexit. We show that the Bank’s communication strategy acted to complement the stance of monetary policy, which had responded by lowering Bank rate and expanding QE, and acted to lower the term premium that might otherwise have risen in response to Brexit uncertainty.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund