Transcript Bank of England Inflation Report February 2014 Output and supply

Inflation Report
February 2014
Output and supply
Chart 3.1 GDP and sectoral output(a)
(a) Chained-volume measures. GDP is at market prices. Indices of sectoral output are at basic prices. The figures in parentheses show 2010 weights in gross value added.
Chart 3.2 Bank staff projection for near-term output(a)
(a) Chained-volume measures. GDP is at market prices. The magenta diamond shows Bank staff’s central projection for the preliminary estimate of GDP growth for Q4 at the time of
the November Report. The green diamond shows the current staff projection for the preliminary estimate of GDP growth for Q1. The bands on either side of the diamonds show
uncertainty around those projections based on staff estimates of the root mean squared errors of forecasts for quarterly GDP growth made since 2004. As the staff projections are
for the preliminary estimates of GDP, they can differ from those used to construct the GDP fans, for example that shown in Chart 5.1, because those fans are based on the MPC’s
best collective judgement of the final estimate of GDP.
Chart 3.3 Quarterly growth in whole-economy output and
employment
Source: ONS (including the Labour Force Survey).
(a)
(b)
Chained-volume measure at market prices.
Diamond shows change in the three months to November 2013 relative to the previous three months.
Chart 3.4 Self-employment share(a)
Source: Labour Force Survey.
(a) Percentage of LFS total employment. Rolling three-month measure. First data point is May 1992.
Chart 3.5 Bank staff projection for the near-term headline
LFS unemployment rate(a)
Sources: Labour Force Survey and Bank calculations.
(a) The magenta diamonds show Bank staff’s central projections for the headline unemployment rate for September, October, November and December 2013 at the time of the November
Report. The green diamonds show the current staff projections for the headline unemployment rate for December 2013, and January, February and March 2014. The bands on either
side of the diamonds show uncertainty around those projections based on staff estimates of root mean squared errors of past forecasts for the three-month LFS unemployment rate.
Chart 3.6 Contributions to the change in the unemployment
rate since 2010 Q1(a)
Sources: Labour Force Survey and Bank calculations.
(a) 2013 Q4 is proxied using data in the three months to November.
(b) Percentage of the 16+ population.
(c) Percentage of the 16+ economically active population. May not equal the sum of its components due to rounding.
Chart 3.7 Survey indicators of capacity utilisation(a)
Sources: Bank of England, BCC, CBI, CBI/PwC, ONS and Bank calculations.
(a) Measures are produced by weighting together surveys from the Bank’s Agents (manufacturing and services), the BCC (non-services and services) and the CBI (manufacturing,
financial services, business/consumer services and distributive trades) using nominal shares in value added. The surveys are adjusted to have a mean of zero and a variance of one
over 1999 Q1 to 2007 Q3. The BCC data are non seasonally adjusted.
Chart 3.8 Flows from unemployment to employment, including
and excluding government-supported training schemes(a)
Sources: Labour Force Survey and Bank calculations.
(a) Short-term is defined as less than six months, medium-term is defined as six to twelve months and long-term is defined as more than twelve months . For each group of
short, medium and long-term unemployed, the chart shows flows into LFS employment divided by the number of people who were unemployed for that length of time in the
previous quarter. The dashed lines show those flows excluding participants of government-supported training and work placement schemes. Based on LFS microdata that
have been seasonally adjusted by Bank staff. Data are to 2013 Q3 and based on the 16–64 population.
Chart 3.9 Contributions to the fall in unemployment since
2013 Q2 by duration(a)
Source: Labour Force Survey.
(a) Change in LFS unemployment divided into those who have been unemployed for less than six months, between six and twelve months, and more than one year.
Chart 3.10 Part-time employees who could not find
full-time work(a)
Source: Labour Force Survey.
(a) Number of people reporting to the LFS that they are working part-time because they could not find a full-time job, as a percentage of LFS total employment. Rolling
three-month measure. First data point is May 1992.
Chart 3.11 Selected indicators of labour market slack(a)
Sources: ONS (including the Labour Force Survey) and Bank calculations.
(a) The chart shows the differences, in number of standard deviations, between the values of these indicators and their 1992–2007 averages. The orange line is based on
ONS data for the three months to November 2013 and Bank staff estimates for 2013 Q4. The blue line is based on ONS data and Bank staff estimates for 2013 Q1.
(b) Difference between the unemployment rate and Bank staff’s central estimate of the medium-term equilibrium unemployment rate.
(c) Difference between Bank staff’s estimate of the trend participation rate and the participation rate.
(d) Percentage difference between total weekly hours worked and Bank staff’s estimate of trend total weekly hours worked. The standardised data have been multiplied by -1
so that a higher number indicates more slack. Trend total weekly hours worked has been revised up since this chart was first published in August 2013 in Monetary policy
trade-offs and forward guidance, reflecting an upward revision to trend average hours worked per week.
(e) Percentage difference between average weekly hours worked and Bank staff’s estimate of trend average weekly hours worked. The standardised data have been
multiplied by -1 so that a higher number indicates more slack. This measure was not included in the version of this chart that was published in August 2013.
(f) Number of people reporting to the LFS that they are in temporary employment because they could not find a permanent job, as a percentage of the number of people in
temporary employment. Data begin in 1992 Q2.
(g) Number of UK vacancies (excluding agriculture, forestry and fishing) divided by LFS unemployment. Data on UK vacancies are only available from 2001 Q2 onwards. Prior
to that, UK vacancies have been projected backwards using changes in the number of vacancies at UK job centres. Data on vacancies at UK job centres for 2001 Q2 have
been estimated using data for April 2001. The standardised data have been multiplied by -1 so that a higher number indicates more slack.
Chart 3.12 Labour productivity
Source: ONS (including the Labour Force Survey).
(a) Recessions are defined as at least two consecutive quarters of falling output (at constant market prices). The recessions are assumed to end once output began to rise,
apart from the 1970s where two separate occasions of falling output are treated as a single recession.
Tables
Table 3.A Monitoring the MPC’s key judgements
Table 3.B Employment and participation
Source: ONS (including the Labour Force Survey).
(a)
(b)
(c)
(d)
(e)
(f)
Quarterly averages.
Unless otherwise stated.
Three months to November.
Quarterly changes, thousands, except for the final column, which shows changes in the three months to November 2013 relative to the previous three months.
Average is for 1999 Q2–2007.
Percentage of the 16+ population.
Table 3.C Average weekly hours worked and a measure of
‘desired’ hours
Sources: ONS (including the Labour Force Survey) and Bank calculations.
(a)
(b)
(c)
(d)
Quarterly averages.
Unless otherwise stated.
Three months to November.
Actual hours worked adjusted for the difference between actual and desired working hours of those in work. Based on the methodology set out in Bell, D and
Blanchflower, D (2013), ‘How to measure underemployment?’, Peterson Institute for International Economics Working Paper No. 13-7. Based on LFS microdata
that have been seasonally adjusted by Bank staff. Average since 2001 Q2.