Inflation Report
February 2007
Demand
Chart 2.1 Nominal GDP and domestic demand(a)
(a) At current market prices.
Chart 2.2 Household consumption(a)
(a) Chained-volume measure, includes non-profit institutions serving households.
Chart 2.3 Agents’ survey: spending over the
Christmas/‘sales’ period(a)
(a) Unweighted responses of 110 contacts to the question: ‘Over the Christmas/‘sales’ period to date, compared with the same period last year, has the value of your sales fallen
substantially/fallen slightly/been unchanged/risen slightly/risen substantially?’.
Chart 2.4 Contributions to quarterly growth in real post-tax
labour income
(a)
(b)
(c)
(d)
General government benefits minus employees’ National Insurance contributions.
Wages and salaries plus mixed income.
Taxes including income and Council Tax.
Consumption expenditure deflator (including non-profit institutions serving households).
Chart 2.5 Business investment revisions(a)
(a) Revisions are calculated as the current estimate of the real quarterly growth rate less the estimate of the real quarterly growth rate at the time of the first Quarterly National
Accounts release. Revisions are shown for initial estimates between 1993 Q1 and 2004 Q4. Data before implementation of ESA(95) in 1998 are for ‘private other investment’ and
investment by public corporations.
Chart 2.6 Measures of business investment
Sources: BCC and ONS.
(a) Business investment, chained-volume measure. Data exclude the transfer of nuclear reactors from the public corporation sector to central government in 2005 Q2.
(b) Percentage balance of companies who say they have revised up their planned investment in plant and machinery over the past three months minus those who say they have revised it down.
The services and manufacturing balances have been weighted together based on the average shares since 1996 of real business investment accounted for by distribution and other
services, and the remainder of business investment respectively. Data are non seasonally adjusted.
Chart 2.7 Business investment and the relative price of
capital(a)
(a) Data exclude the transfer of nuclear reactors from the public corporation sector to central government in 2005 Q2.
(b) Ratio of the business investment deflator to the GDP deflator at market prices.
(c) Ratio of the chained-volume measure of business investment to the chained-volume measure of GDP at market prices.
Chart 2.8 German consumption and employment
Source: Eurostat.
(a) Chained-volume measure, includes non-profit institutions serving households.
(b) Number of persons engaged in economic activity with place of work in Germany.
Chart 2.9 US housing market and consumption
Sources: Bureau of Economic Analysis and Office of Federal Housing Enterprise Oversight.
(a) Office of Federal Housing Enterprise Oversight house price index deflated by the personal consumption expenditures deflator.
(b) Chained-volume measures.
Chart 2.10 Export and import volumes(a)
(a) Chained-volume measures, excluding the estimated impact of MTIC fraud.
Chart 2.11 Import penetration and relative prices(a)
(a) Excluding the estimated impact of MTIC fraud.
(b) Ratio of the chained-volume measure of imports to the chained-volume measure of gross final expenditure.
(c) Ratio of the import deflator to the gross final expenditure deflator.
Tables
Table 2.A Expenditure components of demand(a)
Percentage changes on a quarter earlier
Averages
2004
2005
2005
Q4
2006
Q1
Q2
Q3
Household consumption(b)
Government consumption
Investment
of which, business investment
Final domestic demand
Change in inventories(c)(d)
Alignment adjustment(d)
Domestic demand
‘Economic’ exports(e)
‘Economic’ imports(e)
Net trade(d)
0.8
0.5
0.9
0.2
0.8
0.0
0.0
0.8
1.4
1.7
-0.1
0.3
0.8
1.4
0.9
0.5
-0.1
-0.1
0.4
1.7
1.1
0.1
0.6
0.5
0.5
0.7
0.6
-0.1
0.1
0.6
2.3
1.9
0.0
0.3
0.2
2.0
2.1
0.6
0.2
0.1
0.8
1.6
2.1
-0.2
0.9
0.6
0.5
2.0
0.9
0.1
-0.1
0.8
1.1
1.3
-0.1
0.4
0.8
1.8
3.1
0.6
0.1
-0.1
0.7
-0.9
-0.7
0.0
Real GDP at market prices
0.6
0.5
0.7
0.7
0.7
0.7
(a)
(b)
(c)
(d)
(e)
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.
Corporate profits in
the United Kingdom
Chart A Net rate of return and profit share
(a) The net rate of return is for non-oil and gas private non-financial corporations. It is the ratio of operating surplus (which includes UK trading profits), adjusted for capital consumption, to
capital employed (including the value of inventories), also adjusted for capital consumption.
(b) Bank estimate. Final output is defined as gross value added of the non-oil and gas private sector plus intermediate inputs. Profits defined as final output minus employees’ compensation,
intermediate inputs and alignment adjustments.