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Equity Markets, Block Realignments and the UK Exchange Rate

Published online by Cambridge University Press:  26 March 2020

Ray Barrell
Ray Barrell*
Affiliation:
National Institute of Economic and Social Research
*
e-mail: r.barrell@niesr.ac.uk
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Extract

In recent weeks, equity markets have been very weak and the euro exchange rate has risen by more than 10 per cent against the dollar. The UK's effective exchange rate has also depreciated, removing some, but not all, of the overvaluation we identified in the April Review. We report on recent movements in table 1, and their implications are discussed in the UK and World forecast chapters in this Review. To an extent the movements in the US stock markets and the exchange rate are linked, but there does seem to be some ‘excess strength’ in the euro, which will in turn contribute to the weakness of Euro Area equity prices.

Type
Articles
Information
National Institute Economic Review , Volume 181 , July 2002 , pp. 38 - 43
Copyright
Copyright © 2002 National Institute of Economic and Social Research

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Footnotes

∗

I would like to thank Martin Weale, Dawn Holland, Joe Byrne and Nigel Pain for helpful comments.

References

Barrell, R. (2002), ‘The UK and EMU: choosing the regime’, National Institute Economic Review, 180, April.CrossRefGoogle Scholar
Barrell, R., and Pain, N. (2000), ‘Monetary and fiscal policy in Europe’, National Institute Economic Review, 174, October.CrossRefGoogle Scholar