Transcript Bank of England Inflation Report May 2015 Demand

Inflation Report
May 2015
Demand
Chart 2.1 GDP growth in 2014 supported by household
spending, net trade and investment
Contributions to average quarterly GDP growth(a)
(a)
(b)
(c)
(d)
Chained-volume measures. Contributions may not sum to total due to rounding.
Includes non-profit institutions serving households.
Excludes the alignment adjustment.
Includes government expenditure, statistical adjustments and acquisitions less disposals of valuables.
Chart 2.2 Consumers think it is a good time to make big
purchases
Consumer confidence: major purchases index(a)
Sources: European Commission (EC), GfK (research carried out on behalf of the European Commission) and Bank calculations.
(a)
Net balance of respondents reporting that, in view of the general economic situation, now is the right time for people to make major purchases such as furniture or
electrical goods.
Chart 2.3 Weaker housing starts could weigh on
investment in new homes
Housing starts and investment in new dwellings
Sources: Department for Communities and Local Government, ONS and Bank calculations.
(a)
(b)
Chained-volume measure. Excludes improvements to existing dwellings.
UK permanent dwellings financed and built by private developers, calculated from national series. Private permanent dwelling starts in Wales are grown in line with Welsh
total permanent dwelling starts since 2011 Q2. From 2014 Q2, UK data are grown in line with data for England.
Chart 2.4 Business investment growth moderated in the
second half of 2014
Contributions to four-quarter business investment growth(a)(b)
(a)
(b)
(c)
Chained-volume measures. Contributions prior to 2011 are indicative estimates.
Figures in parentheses are shares in total business investment in 2011.
Total business investment growth less contributions from the mining and quarrying, oil and gas extraction, utilities, manufacturing and service sectors.
Chart 2.5 Companies’ investment intentions have
softened but remain above average
Survey measures of companies’ investment intentions(a)
Sources: Bank of England, BCC, CBI, CBI/PwC and Bank calculations.
(a)
Survey measures of investment intentions from the Bank’s Agents (companies’ intended changes in investment over the next twelve months), BCC (net percentage
balance of companies who say they have increased planned investment in plant and machinery over the past three months) and CBI (net percentage balance of
companies who say they have revised up planned investment in plant and machinery over the next twelve months). Measures weight together sectoral surveys using
shares in real business investment. BCC data are non seasonally adjusted.
Chart 2.6 Euro-area interest rates have fallen sharply,
particularly in the periphery
Interest rates on bank loans in the euro area(a)
Sources: European Central Bank and Bank calculations.
(a)
(b)
(c)
Weighted average of annualised agreed interest rates on lending to household and non-financial corporations. Measures weight together sectoral rates using shares in the
total national stock of loans. Individual countries’ interest rates are then weighted together using shares in the total stock of loans across countries. Data are non
seasonally adjusted.
Includes Ireland, Italy, Portugal and Spain.
Includes Austria, Belgium, Germany, Finland, France and the Netherlands.
Chart 2.7 Growth in Chinese activity has moderated
PMIs and industrial production in China
Sources: HSBC, Markit Economics, National Bureau of Statistics and Thomson Reuters Datastream.
(a)
(b)
A reading of above (or below) 50 indicates increasing (or decreasing) output.
Prior to 2014, data for January are not available. Data for January and February 2015 are average figures for industrial production across the two months, as quoted by
the National Bureau of Statistics. Data are non seasonally adjusted.
Chart 2.8 Wide current account deficit in 2014
UK current account
Chart 2.9 Export growth picked up sharply in 2014 Q4
UK exports and UK-weighted world trade
Sources: IMF WEO April 2015, OECD, ONS, Thomson Reuters Datastream and Bank calculations.
(a)
(b)
Chained-volume measure. Headline exports data have been adjusted by Bank staff for MTIC fraud by an amount equal to the ONS’s imports adjustment.
Constructed using data for import volumes of 146 countries weighted according to their shares in UK exports. For the vast majority of countries, the latest observation is
2014 Q4. For those countries where national accounts data for 2014 Q4 are not yet available, data are assumed to be consistent with projections in the IMF WEO
April 2015.
Tables
Table 2.A Monitoring the MPC’s key judgements
Table 2.B Household consumption growth slowed in Q4;
investment fell on the quarter
Expenditure components of demand(a)
(a)
(b)
(c)
(d)
(e)
(f)
Chained-volume measures unless otherwise stated.
Includes non-profit institutions serving households.
Investment data take account of the transfer of nuclear reactors from the public corporation sector to central government in 2005 Q2.
Excludes the alignment adjustment.
Percentage point contributions to quarterly growth of real GDP.
Excluding the impact of missing trader intra-community (MTIC) fraud. Official MTIC-adjusted data are not available for exports, so the headline exports data have been
adjusted by Bank staff for MTIC fraud by an amount equal to the ONS import adjustment.
Table 2.C Consumption grew broadly in line with income
in 2014
Income, consumption and saving
(a)
(b)
(c)
(d)
(e)
Total available household resources divided by the consumer expenditure deflator.
Wages and salaries plus mixed income less taxes plus net transfers, divided by the consumer expenditure deflator.
Chained-volume measure. Includes non-profit institutions serving households.
Percentage of household post-tax income.
Percentage of household post-tax income excluding flows into employment-related pension schemes.
Table 2.D UK-weighted world GDP growth was broadly
steady in Q4
GDP in selected countries and regions(a)
Sources: Eurostat, IMF World Economic Outlook (WEO) April 2015, Japanese Cabinet Office, National Bureau of Statistics of China, OECD, ONS, Thomson Reuters
Datastream, US Bureau of Economic Analysis and Bank calculations.
(a)
(b)
(c)
Real GDP measures. Figures in parentheses are shares in UK goods and services exports in 2013 from the 2014 Pink Book.
Figures for China are percentage changes in GDP on a year earlier. The earliest observation for China is 2000 Q1. Data are non seasonally adjusted.
Constructed using data for the real GDP growth rates of 146 countries weighted according to their shares in UK exports. The observation for 2014 Q4 is an estimate. For
those countries where national accounts data for 2014 Q4 are not yet available, data are assumed to be consistent with projections in the IMF WEO April 2015.