Inflation Report
August 2007
Demand
Chart 2.1 Nominal GDP and domestic demand(a)
(a) At current market prices.
Chart 2.2 Retail sales and household consumption
(a) Volume of sales at 2000 prices.
(b) Chained-volume measure (reference year 2003). Includes non-profit institutions serving households.
Chart 2.3 Household consumption(a)
(a) Chained-volume measure. Includes non-profit institutions serving households. The dates indicate the quarter in which Bank Rate was first increased.
Chart 2.4 Contributions to quarterly growth in real
post-tax labour income
(a) Wages and salaries plus mixed income.
(b) Taxes include income and Council Tax.
(c) Consumption expenditure deflator (including non-profit institutions serving households).
(d) General government benefits minus employees’ National Insurance contributions.
Chart 2.5 Business investment and company profits
(a) At current prices. Data exclude the transfer of nuclear reactors from the public corporation sector to central government in 2005 Q2.
(b) Excluding the alignment adjustment.
Chart 2.6 Investment intentions(a)
Sources: Bank of England, BCC, CBI, CBI/Grant Thornton, CBI/PwC and ONS.
(a) Measures weight together sectoral surveys using shares in real business investment. Disaggregated data on financial services investment are provided by the ONS, but are not
subject to the scrutiny applied to officially released National Statistics.
(b) Net percentage balances of companies who plan to increase investment in plant and machinery over the next twelve months. Four-quarter moving average.
(c) Companies’ intended changes in investment over the next twelve months.
(d) Net percentage balances of companies who say they have revised up their planned investment in plant and machinery over the past three months. Non seasonally adjusted.
Four-quarter moving average.
Chart 2.7 World GDP(a)
Source: IMF World Economic Outlook Databases.
(a) Volume measure using purchasing power parity exchange rates. Includes IMF projections.
(b) Based on World Economic Outlook Update, released on 25 July.
Chart 2.8 Changes in the euro-area investment to GDP
ratio(a)
Sources: Eurostat, Thomson Datastream and Bank calculations.
(a) Chained-volume measure. Thomson Datastream data used prior to 1995. The dates refer to the quarter in which output troughed.
Chart 2.9 Contributions to quarterly growth in
US GDP(a)
Source: Bureau of Economic Analysis.
(a) Chained-volume measures.
(b) Includes non-profit institutions serving households.
Chart 2.10 Survey indicators of goods exports
Sources: Bank of England, BCC and CBI.
(a) Manufacturing companies’ reported annual growth in production for sales to overseas customers over the past three months.
(b) Net percentage balance of manufacturing companies saying that export sales/deliveries increased on the quarter. Four-quarter moving average.
Chart 2.11 ‘Economic’ imports and exports of goods(a)
(a) Chained-volume measures. Excludes the estimated impact of MTIC fraud.
Tables
Table 2.A Expenditure components of demand(a)
Percentage changes on a quarter earlier
Averages
2006
2007
2004
2005
2006
Q4
Q1
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
0.8
0.1
0.8
0.0
0.0
0.8
1.4
1.7
-0.1
0.3
0.6
1.0
0.7
0.5
-0.1
-0.1
0.2
2.0
1.2
0.2
0.7
0.5
2.4
3.1
0.9
0.0
0.0
0.9
0.9
1.1
-0.1
1.1
0.5
3.1
4.1
1.3
-0.3
-0.4
0.6
1.6
0.9
0.1
0.5
0.5
1.1
-0.6
0.6
0.2
-0.2
0.7
-0.5
-0.4
0.0
Real GDP at market prices
0.6
0.5
0.8
0.8
0.7
(a) Chained-volume measures.
(b) Includes non-profit institutions serving households.
(c) Excludes the alignment adjustment.
(d) Percentage point contributions to quarterly growth of real GDP.
(e) Excludes the estimated impact of missing trader intra-community (MTIC) fraud.
Table 2.B Household sector trends(a)
Percentage changes on previous quarter(b)
Twenty-year
Averages
2006
2007
averages(c)
2005
2006
H1
Q3
Q4
Q1
Real consumption(d)
Real post-tax labour income(e)
Real post-tax income(f)
0.7
0.6
0.7
0.3
0.5
1.0
0.6
0.2
-0.1
0.3
-0.1
0.3
1.1
0.4
-0.1
0.5
0.1
-1.3
Saving ratio(g)
Inflation-adjusted saving ratio(h)
7.2
5.7
5.6
4.4
5.7
4.5
5.0
3.9
3.9
2.8
2.1
1.1
Sources: ONS and Bank of England calculations.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Includes non-profit institutions serving households.
Unless otherwise stated.
1987 Q2 to 2007 Q1.
Chained-volume measure.
See Chart 2.4 for details on construction.
Total available households’ resources deflated by consumption expenditure deflator.
Percentage of households’ post-tax income.
Saving adjusted for the impact of inflation on the real value of assets and liabilities held by the household
sector which are fixed in nominal terms. Percentage of inflation-adjusted post-tax income.
Revisions to the
National Accounts
Table 1 Revisions to annual growth in real GDP and
selected expenditure components(a)
Percentage points
GDP(b)
Consumption(c)
Business investment(d)
Net trade(b)(e)
2006
Revision to:
2006
2005
2004
2006
2005
2004
2006
2005
2004
2007 Blue Book
0.08
-0.09
0.00
0.05
0.10
0.00
-0.20
-0.52
0.02
0.04
Memo: average revisions to equivalent
years:(f)
Year-1 Year-2
Year-3
Year-1
Year-2
Year-3
Year-1
Year-2
Year-3
Year-1
Annual Blue Book releases
0.03
0.15
0.14
0.10
0.02
-0.03
0.92
0.05
0.83
Non-Blue Book National Accounts
releases
0.02
0.00
0.00
-0.02
0.00
0.00
0.16
0.00
0.00
(a)
(b)
(c)
(d)
(e)
(f)
2005
2004
0.03
0.00
Year-2
Year-3
0.02
0.03
0.01
0.01
0.00
0.00
Based on calendar-year data.
Memo rows exclude revisions in September 2003 related to adjustments to import data to account for missing trader intra-community (MTIC) fraud.
Includes non-profit institutions serving households.
Excludes the transfer of nuclear reactors from the public corporation sector to central government in 2005 Q2.
Contributions to GDP growth.
Average revisions between National Accounts releases from March 1995 to March 2007. For example, Year-1 refers to the average revisions to the
previous calendar year.