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New Insights into Price-Setting Behaviour in the UK: Introduction and Survey Results

Authors


  • Corresponding author: Jennifer V. Greenslade, Bank of England, Threadneedle Street, London EC2R 8AH, UK. Email: jennifer.greenslade@bankofengland.co.uk.

  • The views expressed in this article are those of the authors, and not necessarily those of the Bank of England or the Reserve Bank of New Zealand. We thank Malcolm Manekshaw for excellent research assistance. We are grateful to the Bank of England’s Agents, Jacqui Dwyer, Neal Hatch, Thomas Mathä, Stephen Millard, Simon Price, Tony Yates, seminar participants at the Bank of England and the Reserve Bank of New Zealand, an anonymous referee for the Bank of England working paper series, two anonymous referees for this Feature and Steve Machin for useful comments.

Abstract

This article introduces the other contributions in this Feature which use individual price data to investigate the extent of pricing rigidities in the UK. It also reports the most relevant results of a new survey of the price-setting behaviour that we have conducted for the UK, including details about why prices are sticky. The articles consider whether the microdata or survey results are consistent with particular theories of price setting. Our results suggest that there is heterogeneity in price-setting behaviour, which is ignored in typical ‘representative agent’ models.

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