In this paper three contributions are made. First, empirical support is provided for the 'trade-off' model of corporate capital structure where companies borrow to take advantage of the tax benefits of debt, which they set against possible costs of overindebtedness. Second, it is shown...

This paper shows how a Merton-model approach can be used to develop measures of the probability of failure of individual quoted UK companies. Probability estimates are then constructed for a group of failed companies and their properties as leading indicators of failure assessed. Probability...

In this paper the determinants of failure among individual UK public and private companies are examined, over the period from 1991 to 2001. Using information on profitability, interest cover, capital gearing, liquidity, company size, industry, whether a firm is a subsidiary and overall economic...

This annual article on the latest survey of households carried out by NMG Consulting on behalf of the Bank focuses on the potential impact of higher interest rates. If interest rates were to rise by two percentage points, while over the same period incomes rose by 10%, then the proportion of...

This article examines recent developments in household balance sheets using disaggregated data from an annual survey carried out by NMG Consulting on behalf of the Bank. The survey indicates that household debt levels remain well above historical averages, but are little changed since last year....

A number of factors are likely to have restrained household spending growth over the recent past, including weak income growth, tight credit conditions, concerns about debt levels, the fiscal consolidation and uncertainty about future incomes. This article examines the factors affecting spending...

This article is the first study to use microdata to assess the role of debt levels in determining UK households’ spending patterns over the course of the recent recession. There is evidence that high levels of household debt have been associated with deeper downturns and more protracted...

This paper examines how corporate behaviour is related to financial pressure, where the financial pressure is on account of pension contributions to the company pension scheme. Using a large panel of quoted non-financial UK firms from 1983-2002, we estimate generalised methods of moments models...

This paper examines the behaviour of individual producer prices in the United Kingdom, and uncovers a number of stylised facts about pricing behaviour. First, on average 26% of producer prices change each month, although there is considerable heterogeneity between sectors and price changes occur...