Inflation Report
November 2006
Demand
Chart 2.1 Nominal GDP and domestic demand(a)
(a) At current market prices.
Chart 2.2 Household spending on energy(a)
(a) Bank estimates. Energy is defined as electricity, gas and other fuels plus vehicle fuels and lubricants.
Chart 2.3 Investment intentions from Agents’ scores
(a) Calculated as differences from averages since July 1997. For the underlying Agents’ scores, a score of zero indicates that UK investment spending over the next twelve months is
expected to be unchanged, compared with current spending, and a positive (negative) score indicates investment spending is expected to be higher (lower) than current spending.
Chart 2.4 World GDP(a)
Source: IMF World Economic Outlook Database September 2006.
(a) Volume measure using purchasing power parity exchange rates. 2006 is an IMF forecast.
Chart 2.5 US home sales and residential investment
Sources: Bureau of Economic Analysis and Thomson Financial Datastream.
(a) Chained-volume measure.
(b) Sales of existing single-family homes.
Chart 2.6 UK goods exports and imports(a)
(a) Chained-volume measures.
(b) Including estimated missing trader intra-community (MTIC) fraud.
(c) Excluding fraud adjustments.
Tables
Table 2.A Expenditure components of demand(a)
Percentage changes on a quarter earlier
Averages
(a)
(b)
(c)
(d)
(e)
2005
2006
2004
2005
Q3
Q4
Q1
Q2
Household consumption(b)
0.8
0.3
0.4
0.6
0.4
0.9
Government consumption
0.5
0.7
0.6
0.4
0.3
0.8
Investment
0.9
1.1
2.5
0.8
2.0
0.6
of which, business investment 0.2
0.7
1.0
0.1
2.0
1.6
Final domestic demand
0.8
0.5
0.7
0.7
0.6
0.9
Change in inventories(c)(d)
0.0
-0.1
0.2
-0.1
0.1
0.1
Alignment adjustment(d)
0.0
-0.1
0.2
-0.1
0.4
-0.6
Domestic demand
0.8
0.3
1.0
0.5
1.0
0.4
‘Economic’ exports(e)
1.4
1.4
0.2
2.3
2.3
1.3
‘Economic’ imports(e)
1.7
0.8
2.1
1.3
3.4
0.3
Net trade(d)
-0.1
0.1
-0.6
0.2
-0.4
0.2
Real GDP at market prices
0.6
0.5
0.5
0.7
0.7
0.7
Chained-volume measures.
Includes non-profit institutions serving households.
Excludes the alignment adjustment.
Percentage point contributions to quarterly growth of real GDP.
Excludes the estimated impact of missing trader intra-community (MTIC) fraud.
Table 2.B Indicators of retail sales growth
Averages
2006
2004
2005
Q1
Q2
Q3
Oct.
1.1
0.7
-0.5
1.9
0.8
n.a.
BRC (total)
4.4
3.2
2.8
6.9
5.6
5.2
BRC (like-for-like)
1.6
-0.5
-0.2
4.2
2.8
2.5
CBI(b)
24
-14
-15
7
11
7
Agents(c)
1.2
0.2
0.8
1.1
1.5
n.a.
Retail sales volumes, growth on a
quarter earlier
ONS
Retail sales values, growth on a
year earlier(a)
Balances/scores(a)
Sources: Bank of England, BRC, CBI and ONS.
(a) Averages of monthly data. October figures are averages of the three months to October.
(b) Balance of retailing respondents in the CBI Distributive Trades Survey reporting sales higher than a year earlier.
(c) A score of zero indicates that retail sales values were unchanged in the latest three months compared to a year earlier. A positive (negative) score indicates retail sales were
higher (lower) than a year earlier.
Table 2.C GDP in the major economies(a)
Percentage changes on a quarter earlier
Averages
2005
2006
2004
2005
Q3
Q4
Q1
Q2
Q3
0.4
0.5
0.6
0.4
0.8
0.9
n.a.
Germany
0.0
0.4
0.5
0.3
0.7
0.9
n.a.
France
0.5
0.3
0.7
0.3
0.4
1.2
n.a.
Italy
0.1
0.1
0.3
0.0
0.7
0.5
n.a.
United States
0.8
0.8
1.0
0.4
1.4
0.6
0.4
Japan
0.1
1.0
0.5
1.0
0.8
0.2
n.a.
Euro area
of which:
Sources: Eurostat, Japanese Cabinet Office and US Bureau of Economic Analysis.
(a) Chained-volume measures.
Table 2.D Export orders(a)
Series
2005
2006
averages(b) Averages Q1
Q2
Q3
Oct.
Manufacturing
BCC orders
8
11
22
15
28
n.a.
50.3
50.9
50.0
53.4
51.8
53.9
CBI orders
-9
-6
-3
7
-1
n.a.
CBI optimism(d)
0
-6
3
5
1
n.a.
10
9
26
12
21
n.a.
CIPS/RBS orders(c)
Services
BCC orders
Sources: BCC, CBI and CIPS/RBS.
(a) Percentage balances of respondents reporting ‘higher’ relative to ‘lower’ export orders, except CIPS/RBS where a reading above 50 suggests increasing orders, and below 50
suggests falling orders.
(b) Averages since 1989 for BCC, 1972 for CBI Quarterly Industrial Trends and 1996 for CIPS/RBS.
(c) Average of monthly indices.
(d) Optimism about export prospects for the next twelve months.