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Economic Update

Economic Update. Peter Andrews Agency for Greater London Bank of England November 2011. Prospects for activity and inflation. Aug GDP projection; market interest rate exps and £200 bn asset purchases. Chart 1 Nov GDP projection; market interest rate exps and £275 bn asset purchases.

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Economic Update

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  1. Economic Update Peter Andrews Agency for Greater London Bank of England November 2011

  2. Prospects for activity and inflation

  3. Aug GDP projection; market interest rate exps and £200 bn asset purchases Chart 1 Nov GDP projection; market interest rate exps and £275 bn asset purchases

  4. Chart 1.1 Bank Rate and forward market interest rates

  5. Chart 5.6 Nov CPI inflation projection; mkt interest rate exp and £275 bn asset purchases Chart 5.7 Aug CPI inflation projection; mkt interest rate exps and £200 bn asset purchases

  6. Euro area developments and risks • Extreme outcomes excluded from fan charts • But projections capture risks already reflected in: • Asset prices • Bank funding costs • Confidence

  7. Money and asset prices

  8. Chart 1.3 Selected European ten-year spot government bond yields

  9. Chart 1.8 UK banks’ longer-term funding spreads

  10. Chart 1.9 Term issuance by major UK lenders in public markets(a) Sources: Bank of England, Dealogic and Bank calculations. (a) Data as at 9/11/11, shown at a quarterly frequency up to 2011 Q3. Includes debt issued by Banco Santander, Bank of Ireland, Barclays, Co-operative Financial Services, HSBC, Lloyds Banking Group, National Australia Bank, Nationwide, Northern Rock and Royal Bank of Scotland. Term issuance refers here to securities with an original contractual maturity or earliest call date of at least 18 months. It includes subordinated lower Tier 2 and Tier 3 capital instruments with debt features. (b) Senior debt issued under HM Treasury’s Credit Guarantee Scheme.

  11. Chart 1.10 Loans to UK businesses by size

  12. Corporate credit availability by firm size Credit Conditions Survey, Oct 2011

  13. Household secured credit availability(a)

  14. RICS: regional house prices over past 3 months

  15. Demand, output, capacity and employment

  16. Chart B Net trade as a percentage of GDP(a) (a) Chained-volume measures. Excluding the estimated impact of MTIC fraud.

  17. Chart 2.11 Household consumption and real income

  18. Chart 2.9 Contributions of expenditure components to changes in demand in recessions and recoveries

  19. Chart 2.12 Business investment (a) Chart 2.1 UK business and consumer confidence Sources: BCC, CBI, CBI/PwC, research by GfK NOP for the EC, ONS and Bank. (a) Data for manufacturing, financial and consumer/business services surveys weighted using shares in nominal value added. (b) Confidence about turnover. Nsa data for manufacturing and services surveys weighted using shares in nominal value added. (c) Aggregate index derived by averaging answers to Qs 1-4 and 8 in the GfK NOP survey carried out for the EC. Quarterly averages of monthly data. The diamond shows data for October. (a) Chained-volume measure. (b) Recessions are defined as in Chart 2.8.

  20. Agents’ construction scores

  21. Chart 3.9 Survey measures of capacity utilisation Chart 3.8 Labour productivity

  22. Chart 3.4 Public and private sector employment

  23. Change in LFS unemployment rate (three months to August 2011 compared with three months to August 2010)

  24. Costs and prices

  25. Chart 4.2 Direct contribution of energy prices to CPI inflation and Bank staff’s central estimate of VAT contribution

  26. Chart 4.5 Dollar oil and industrial metals prices

  27. Chart 4.8 Measures of domestically generated inflation

  28. Economic Update Peter Andrews Agency for Greater London Bank of England November 2011

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