Do firm expectations respond to monetary policy announcements?

Federico Di Pace, Giacomo Mangiante () and Riccardo M. Masolo
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Giacomo Mangiante: HEC Lausanne

No 1014, Bank of England working papers from Bank of England

Abstract: We study whether firms’ expectations react to the Bank of England’s monetary policy announcements by comparing the responses to the Decision Maker Panel survey filed immediately before and after a Monetary Policy Committee meeting. On the one hand, we find that firms’ expectations and uncertainty about their own business for the most part do not respond to high-frequency monetary policy surprises. On the other hand, announced changes in the monetary policy rate induce firms to revise their price expectations, with rate hikes inducing a reduction in price expectations and uncertainty surrounding them.

Keywords: Central bank communication; firm expectations; high-frequency identification; survey data (search for similar items in EconPapers)
JEL-codes: D84 E52 E58 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2023-02-10
New Economics Papers: this item is included in nep-ban, nep-eec, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://www.bankofengland.co.uk/-/media/boe/files/ ... cy-announcements.pdf Full text (application/pdf)

Related works:
Journal Article: Do firm expectations respond to monetary policy announcements? (2025)
Working Paper: Do firm expectations respond to Monetary Policy announcements? (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:1014

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