Yields on government securities are at their lowest-ever levels (Chart 19), as are yields on investment-grade corporate bonds. Borrowing costs for households and smaller businesses have not fallen as far as for governments or larger companies. That explains why, despite monetary easing, overall credit conditions are somewhat tighter than at the start of the year. Nonetheless, the overall monetary stance, in the UK and globally, remains highly accommodative by any historical metric. For example, real interest rates in the UK have fallen into even more deeply negative territory since the Covid crisis (Chart 20). 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Chart 18: Global financial conditions index Standard deviations from historic average  7 6 5 4 3 2 1 0 -1 -2  1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Sources: Bloomberg Finance L.P., Eikon by Refinitiv and Bank calculations. Notes: Financial conditions indices (FCIs) estimated for 43 economies using principal component analysis. The FCIs summarise information from the following financial series: term spreads, interbank spreads, corporate spreads, sovereign spreads, long-term interest rates, equity price returns, equity return volatility and relative financial market capitalisation. An increase in the index indicates a tightening in conditions. Series shows the average of all country FCIs, weighted according to their shares in world GDP using the IMF’s purchasing power parity (PPP) weights.
For example, Table 1 shows the peak-to-trough fall in a proxy for “social consumption” – spending in pubs, restaurants, cinemas etc – based on Google searches across a range of countries. This is one of the categories of spending likely to have been hit hardest by social distancing measures. It suggests peak-totrough falls of 50-90% in social spending, across a wide range of countries, in the early months of the year. Fast indicators for the UK point to a similarly precipitous fall over the same period. Table 2 looks at the peak-to-trough falls in household spending using CHAPS payments data.4 These lie anywhere between  3  For example, Hacioglu, Känzig and Surico (2020), Carvalho et al (2020), Chetty et al (2020) and Aaronson et al (2020). CHAPS is a sterling same-day payment system that is used to settle high-value wholesale payments as well as time-critical, lowervalue payments like buying or paying a deposit on a property. Further detail on how these data can be used to track the economy can be found below in Chart 8. 4  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  50% and 80% for all spending other than on staples (such as food and rent). Social spending fell as much as 80% while delayable spending, which includes clothing, household goods and cars, fell by around 50%.