Monetary and Financial Conditions Index

Monetary policy - UK - Bank of England.

(MFCI).

The Bank of England's Monetary and Financial Conditions Index is designed to incorporate the relationships between asset prices, credit variables and the real economy that influence the Monetary Policy Committee’s central UK GDP forecast.

The MFCI summarises information from the following series:

• Short-term and long-term interest rates
• The sterling exchange rate index
• Corporate bond spreads
• Equity prices
• Household and corporate bank lending spreads

An increase in the MFCI signals tighter financial conditions and a decrease signals looser conditions.

Looser conditions are consistent with an expected positive GDP contribution from asset prices and credit indicators, and vice versa.

Bank of England: How can we measure UK financial conditions?

See also

• Bank of England
• Corporate bond
• European Central Bank
• Federal Open Market Committee
• Financial stability
• Inflation
• Interest rate
• Monetary policy
• Monetary Policy Committee
• Monetary Policy Report
• Spread
• Sterling exchange rate index
• Unconventional monetary policy

External link

Bank of England: How can we measure UK financial conditions?