Patti, Dario Ansaldo MaimoneAlRabiah, Mishary2023-12-142023-12-142023-12-01Harvardhttps://hdl.handle.net/20.500.14154/70226The aim of this study was to analyse the impact of monetary policy on equity markets (FTSE 100 and FTSE 250) and housing market in the UK. The monetary policy in UK and the U.S. was used to assess the influence on UK’s equity and housing market. Data was collected on UK and U.S. government bond yields (as a proxy for monetary policy), VIX index, FTSE 100 and FTSE 250 and house price index. Pearson’s correlation and OLS regression were used, separating the analysis based on low inflation period (2008 to 2021) and high inflation environment (2022 onwards). Monetary policy has a significant impact on asset prices in the UK. Expansionary monetary policy between 2008 and 2021 adopted by BoE and the Federal Reserve supported the UK equity and housing markets, particularly in the low inflation period of 2008 and 2021. However, as inflation has risen post-pandemic and BoE and the Federal Reserve pursued a contractionary monetary policy by aggressively raising the central bank base rate, the effect on asset prices is mixed. The effect of UK Treasury yields on UK asset prices is stronger than the effect of the U.S. Treasury yields since UK Treasury yields have a direct impact on the UK markets, while the U.S. yields have an indirect influence. Implications of the findings for investors and policymakers are discussed.56enMonetary PolicyAsset PriceThesis