The article explores how UK interest rates are influenced using a special model called factor-augmented vector autoregression. This model helps to better understand the effects of unexpected interest rate changes. By adding factors to the model, it gives a more accurate picture of UK monetary policy and improves predictions. The study found that this approach eliminates certain response patterns seen in traditional models, but also reveals new puzzles related to house prices and the stock market. Overall, the factor-augmented model performs better in predicting outcomes compared to standard models.