Inflation Report
May 2013
Demand
Chart 2.1 Contributions to calendar-year GDP growth(a)
(a) Chained-volume measures. Components may not sum to total due to chain-linking and the statistical discrepancy.
(b) Government investment data have been adjusted by Bank staff to take account of the transfer of nuclear reactors from the public corporation sector to central government in 2005 Q2.
(c) 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 for MTIC
fraud by an amount equal to the ONS import adjustment.
(d) Excludes the alignment adjustment.
Chart 2.2 Household consumption and real income(a)
(a) Includes non-profit institutions serving households.
(b) Total available household resources, deflated by the consumer expenditure deflator.
(c) Chained-volume measure.
Chart 2.3 Households’ financial situation and unemployment
expectations
Source: Research carried out by GfK NOP on behalf of the European Commission.
(a) The question asks how households expect their personal financial situation to change over the next twelve months.
(b) The question asks how households expect the number of people unemployed to change over the next twelve months.
Chart 2.4 Household saving ratio(a)
(a) Percentage of household post-tax income.
(b) Recessions are defined as at least two consecutive quarters of falling output (at constant market prices) estimated using the latest data. Recessions are assumed to end once
output began to rise.
Chart 2.5 Contributions to four-quarter growth in business
investment by sector(a)
(a) Chained-volume measures. The figures in parentheses show 2009 weights in real business investment. Weights do not sum to 100 due to rounding.
(b) Other includes agriculture, construction and public corporations.
Chart 2.6 Capital expenditure by companies with equity and
bond market access(a)
Sources: Dealogic, ONS, Thomson Reuters Datastream and Bank calculations.
(a) The current vintage of ONS business investment data is not available prior to 1997 Q1. Nominal and real business investment prior to that date have been assumed to grow in line
with the series in the 2011 Q1 National Accounts data set.
(b) Chained-volume measure.
(c) Median growth in capital expenditure from publicly listed company accounts, deflated using the ONS business investment deflator. The data set includes companies that have equity
and bond market access, plus those with equity market access only, but not those that have bond market access only.
Chart 2.7 Composition of the fiscal consolidation(a)
Sources: HM Treasury, Institute for Fiscal Studies and Office for Budget Responsibility.
(a) Bars represent the planned fiscal tightening (reduction in government borrowing) relative to the March 2008 Budget, decomposed into tax increases and spending cuts, with the
spending cuts further subdivided into benefit cuts, other current spending cuts and investment spending cuts. The calculations are based on all HM Treasury Budgets, Pre-Budget
Reports and Autumn Statements between March 2008 and March 2013. See www.ifs.org.uk/publications/6683 for more detail.
Chart 2.8 GDP in selected countries and regions(a)
Sources: Eurostat, Indian Central Statistical Organisation, Japanese Cabinet Office, National Bureau of Statistics of China, Thomson Reuters Datastream and
US Bureau of Economic Analysis.
(a) Real GDP measures. Figures in parentheses are shares in UK goods and services exports in 2011 from the 2012 Pink Book. The earliest observation for India
is 2005 Q2. The latest observations for China and the United States are 2013 Q1 and for India, Japan and the euro area are 2012 Q4.
Chart 2.9 US employment and unemployment rates
Source: Bureau of Labor Statistics.
(a) Percentage of the 16+ civilian labour force.
(b) Percentage of the 16+ non-institutional civilian population.
Chart 2.10 World trade and UK exports
Sources: CPB Netherlands Bureau for Economic Policy Analysis, OECD and ONS.
(a) Volume measure. Countries are weighted together using shares in world trade in 2005. OECD data on trade in goods and services are available until 2012 Q2. Diamonds are based on
trade in goods data constructed by CPB Netherlands. The latest diamond shows the average for January and February compared to 2012 Q1.
(b) Chained-volume measure excluding the estimated impact of MTIC fraud. Official MTIC-adjusted data are not available, so the headline exports data have been adjusted for MTIC fraud
by an amount equal to the ONS’s imports adjustment. Diamond shows average headline goods exports in 2013 Q1 compared to 2012 Q1.
Chart 2.11 UK current account
(a) Includes compensation of employees.
Tables
Table 2.A Expenditure components of demand(a)
(a)
(b)
(c)
(d)
(e)
Chained-volume measures.
Includes non-profit institutions serving households.
Government investment is defined as in footnote (b) of Chart 2.1.
Net trade is defined as in footnote (c) of Chart 2.1.
Percentage point contributions to quarterly growth of real GDP.
The role of debt in household
saving decisions
Chart A Household financial assets, residential buildings
assets and financial liabilities(a)
(a) Financial assets and liabilities data are non seasonally adjusted.
(b) Annual data. The latest observation is for end-2011.
Chart B Saving ratios of different groups of households(a)
Sources: Living Costs and Food (LCF) survey and Bank calculations.
(a) Saving ratios calculated using the average consumption and disposable income levels for each group of households. Numbers in parentheses show their share of total income in 2007.
Shares do not sum to 100 due to rounding.
(b) High-debt mortgagors are defined as having outstanding mortgage debt of more than twice their annual disposable income. All other mortgagors are low debt.
Table 1 2012 NMG survey: mortgagors’ responses to debt
concerns and reports of lower or more uncertain future income
Sources: NMG Consulting and Bank calculations.
(a) Questions: ‘Has your household received more or less money, from both work and non-work sources, over the last twelve months than you would have expected this time last year?’
and ‘Are you treating this unexpected decrease in money received by your household as a decrease that is likely to persist?’.
(b) Question: ‘Are you more concerned now than a year ago, that your household income will fall sharply over the next year or so?’.