economic update peter andrews agency for greater london bank of england november 2011
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Economic Update
Peter Andrews
Agency for Greater London
Bank of England
November 2011
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Agency for Greater London
Prospects for activity and inflation
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Agency for Greater London
Chart 1 Nov GDP projection; market interest rate exps and £275 bn asset purchases
Aug GDP projection; market interest rate exps and £200 bn asset purchases
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Agency for Greater London
Chart 1.1 Bank Rate and forward market interest rates
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Agency for Greater London
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
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Agency for Greater London
Euro area developments and risks
• Extreme outcomes excluded from fan charts• But projections capture risks already reflected
in:– Asset prices– Bank funding costs– Confidence
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Agency for Greater London
Money and asset prices
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Agency for Greater London
Chart 1.3 Selected European ten-year spot government bond yields
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Agency for Greater London
Chart 1.8 UK banks’ longer-term funding spreads
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Agency for Greater London
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.
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Agency for Greater London
Chart 1.10 Loans to UK businesses by size
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Agency for Greater London
Corporate credit availability by firm size
Credit Conditions Survey, Oct 2011
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Agency for Greater London
Household secured credit availability(a)
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Agency for Greater London
RICS: regional house prices over past 3 months
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Agency for Greater London
Demand, output, capacity and employment
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Agency for Greater London
Chart B Net trade as a percentage of GDP(a)
(a) Chained-volume measures. Excluding the estimated impact of MTIC fraud.
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Agency for Greater London
Chart 2.11 Household consumption and real income
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Agency for Greater London
Chart 2.9 Contributions of expenditure components to changes in demand in recessions and recoveries
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Agency for Greater London
Chart 2.12 Business investment (a)
(a) Chained-volume measure.(b) Recessions are defined as in Chart 2.8.
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.
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Agency for Greater London
Agents’ construction scores
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
2002 2004 2006 2008 2010
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Agency for Greater London
Chart 3.9 Survey measures of capacity utilisation
Chart 3.8 Labour productivity
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Agency for Greater London
Chart 3.4 Public and private sector employment
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Agency for Greater London
Change in LFS unemployment rate (three months to August 2011 compared with three months to August 2010)
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Agency for Greater London
Costs and prices
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Agency for Greater London
Chart 4.2 Direct contribution of energy prices to CPI inflation and Bank staff’s central estimate of VAT contribution
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Agency for Greater London
Chart 4.5 Dollar oil and industrial metals prices
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Agency for Greater London
Chart 4.8 Measures of domestically generated inflation
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Economic Update
Peter Andrews
Agency for Greater London
Bank of England
November 2011