Transcript Inflation Report February 2006

Inflation Report
February 2006
Demand
Chart 2.1
Contributions to quarterly growth in real consumer spending(a)
(a) Includes non-profit institutions serving households (NPISH).
(b) Spending by households on services, non-durable goods, net tourism and all spending by NPISH.
Chart 2.2
Measures of retail sales values
(a) Three-month average.
(b) The Agents’ scores range from +5 (which denotes a rapidly rising level) to –5 (a rapidly falling level). Each observation relates to the latest three months compared with the same period a year earlier. So
the data presented are comparable to the ONS measure.
Chart 2.3
Household taxes and National Insurance contributions(a)
(a) Taxes include income and Council Tax. National Insurance contributions are defined as total National Insurance contributions less employer contributions.
(b) Labour income is defined as wages and salaries and self-employment income.
Chart 2.4
Household income(a) and consumption(b)
(a) Defined as labour income (wages and salaries and self-employment income) plus government benefits, less National Insurance contributions, income and Council Tax. This has been deflated by the
final consumption expenditure deflator (households and NPISH).
(b) Chained-volume measure. Includes non-profit institutions serving households (NPISH).
Chart 2.5
Revisions to estimates of quarterly business investment growth(a)
(a) The chart includes data up to 2003 Q4. This is because those data are less likely to be revised on account of additional information. Data before implementation of ESA(95) in 1998 are for ‘private
other investment’ and investment by public corporations.
(b) Between initial and latest estimates over the period 1995–2003. The mean revision measures the average revision between initial and final estimates. So it gives an indication of the average bias in
the initial estimate. The mean absolute revision measures the average size of the change irrespective of its direction.
Chart 2.6
Euro-area GDP
Source: Thomson Financial Datastream.
Chart 2.7
Contributions to quarterly growth in US GDP(a)
Source: US Bureau of Economic Analysis.
(a) Chained-volume measures.
Chart 2.8
Business investment and the Tankan survey
Sources: Bank of Japan and Thomson Financial Datastream.
(a) Private non-residential investment.
(b) Forecast for investment by private non-financial companies in tangible fixed assets (including land purchasing expenses but excluding software investment). The forecasts shown are those made
in the penultimate quarter of the fiscal year.
Chart 2.9
UK imports and relative prices(a)
(a) The data have been adjusted to exclude the estimated effects of trade fraud.
(b) The price of UK imports relative to the price of final expenditure.
Chart 2.10
The UK export market share(a)
Sources: Bank of England, IMF World Economic Outlook Database September 2005 and ONS.
(a) The volume of UK exports of goods and services divided by the volume of UK-weighted world imports. World imports have been calculated using IMF data where each individual trade
series has been weighted according to Pink Book estimates of UK export destinations in 2002. UK exports exclude the estimated effects of VAT fraud. The 2005 estimate for UK exports is
based on the average of the first three quarters of data.
Tables
Table 2.A
Expenditure components of demand(a)
Percentage changes on a quarter earlier
2003
2004
Average(b)
H1(b)
H2(b)
Q1
Q2
Q3
Household consumption(c)
0.6
1.2
0.7
0.1
0.2
0.6
Government consumption
1.5
0.3
0.3
0.2
0.1
0.0
Investment
-0.2
1.8
0.3
0.6
0.2
2.2
-0.7
0.5
0.8
-0.3
1.3
0.3
Final domestic demand
0.6
1.1
0.6
0.1
0.3
0.6
Change in inventories(d)(e)
0.1
0.0
0.0
-0.1
-0.2
0.2
Alignment adjustment(e)
0.0
-0.2
0.2
-0.2
-0.1
0.2
Domestic demand
0.8
0.9
0.7
-0.2
-0.1
1.0
Exports
1.0
2.1
0.9
-0.4
4.4
-0.4
Imports
1.0
2.0
1.9
-1.6
2.2
1.9
Net trade(e)
0.0
0.0
-0.3
0.4
0.5
-0.7
Real GDP at market prices
0.8
0.9
0.5
0.2
0.5
0.4
Memo:
Nominal GDP at market prices
1.5
1.3
1.3
0.1
1.5
0.3
of which, business
(a)
(b)
(c)
(d)
(e)
Chained-volume measures, apart from nominal GDP.
Average of quarterly growth.
Includes non-profit institutions serving households.
Excludes the alignment adjustment.
Percentage point contributions to quarterly growth of real GDP.
2005
_
Table 2.B
Indicators of household spending
2004
Retail sales volumes(a)
2005
2006
Average Q1
Q2
Q3
Q4
Jan.
1.1
0.2
0.5
0.4
1.6
n.a.
-2.0
-8.8
4.2
-2.2
-5.1
-3.4
-3
1
-1
-3
-8
-7
Private vehicles’
registrations(a)(b)
GfK NOP consumer
confidence(c)
Sources: Bank of England, GfK NOP, ONS and SMMT.
(a) Percentage changes on previous quarter/latest three months on previous three months.
(b) Monthly data have been seasonally adjusted by Bank staff.
(c) Headline GfK NOP measure. These data are not seasonally adjusted. Quarterly data are averages of the monthly observations. The January figure refers to the three-month average.