Transcript Measuring Recession and Recovery: An Economic Perspective

Measuring Recession and Recovery:
An Economic Perspective
Charles Bean
Deputy Governor, Bank of England
RSS Statistics User Forum Annual Conference
27 October 2010
Chart 1: GDP growth projection, August 2008 IR(a)
Percentage increases in output on a year earlier
6
Bank estimates
of past growth
Projection
4
2
0
ONS Data
(Aug'08 vintage)
-2
ONS data
(Latest vintage)
-4
-6
04
05
06
07
08
09
10
11
Source: Bank of England.
(a) Conditioned on market interest rate expectations.
The fan chart depicts the probability of various outcomes for GDP
growth. To the left of the first vertical dashed line, the distribution
reflects the likelihood of revisions to the data over the past; to the
right, it reflects uncertainty over the evolution of GDP growth in the
future.
Chart 2: Central GDP growth forecasts
Per cent
BoE mean forecast 1yr previously
6
4
2
0
Consensus
forecast
1yr previously(a)
Outturn
-2
-4
-6
-8
97
99
01
03
05
07
09
Sources: Bank of England and Consensus Economics.
(a) Bars show the range of forecasts for the following
year; diamonds show the mean forecast.
Chart 3: Survey measures of capacity
utilisation(a)
Differences from averages since 2000
(number of standard deviations)
3
Range of survey indicators
2
1
0
-1
-2
Services
-3
Manufacturing
-4
2000
2002
2004
2006
2008
2010
Sources: Bank of England, BCC, CBI, CBI/PwC and ONS.
(a) Surveys from the Bank’s Agents (manufacturing and services), the BCC
(manufacturing and services) and the CBI (manufacturing, financial services,
business/consumer services, distributive trades). The BCC data are non seasonally
adjusted.
Chart 4: Unemployment rates(a)
Recessions (b)
Long-term unemployment rate (c)
Per cent
Unemployment rate
14
12
10
8
6
4
2
0
1978 1984 1990 1996 2002 2008
Source: ONS (including the Labour Force Survey).
(a) Rolling three-month measures, unless otherwise stated.
(b) Recessions are defined as at least two consecutive quarters of falling output
(at constant market prices) estimated using the latest data. The recessions are
assumed to end once output began to rise.
(c) Defined as those people who have been unemployed for more than twelve
months divided by the economically active population. Data prior to 1992 are
based on non seasonally adjusted, annual LFS microdata. These annual
observations correspond to the March-May quarter.
Chart 5: UK GDP and employment: now vs 1990s
Percentage change since the prerecession peak in output
1
0
-1
-2
Employment
Dashed lines
represent the
1990s recession
GDP
-3
-4
-5
-6
-7
-8
0
1
2
3
Source: ONS.
4
5
6
7
8 9 10
Quarters
Chart 6: Output after banking crises(a)
Percent of precrisis trend; mean difference from year t = - 1
20
10
0
-10
-20
-30
10th-90th percentile
Estimated mean path
Interquartile range
UK
-40
-50
-1
0
1
2
3
4
5
6
Distance in years from the first year of crisis
7
Source: IMF and Bank calculations.
(a) Sample of 88 banking crises. Output level relative
to trend measured from the ten years before the crisis
to three years before.
Chart 7: Company liquidations and GDP
Recessions
Company liquidations (left-hand scale, inverted)
GDP (right-hand scale)
Number of liquidations
per quarter
Percentage change
on a year earlier
0
10
2,000
5
4,000
0
6,000
-5
8,000
-10
1986 1990 1994 1998 2002 2006 2010
Sources: The Insolvency Service and ONS.
Measuring Recession and Recovery:
An Economic Perspective
The End
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