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Economic Outlook

Economic Outlook. Peter Andrews Agent for Greater London, Bank of England Construction Industry Council 23 May 2012. Prospects for activity and inflation. FEB GDP projection; mkt interest rate expect’ns and £325 bn asset purchases.

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Economic Outlook

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  1. Economic Outlook Peter Andrews Agent for Greater London, Bank of England Construction Industry Council 23 May 2012

  2. Prospects for activity and inflation

  3. FEB GDP projection; mkt interest rate expect’ns and £325 bn asset purchases MAY GDP projection; mkt interest rate expect’ns and £325 bn asset purchases

  4. MAY CPI inflation projection; mkt interest rate expect’ns and £325 bn asset purchases FEB CPI inflation projection; mkt interest rate expect’ns and £325 bn asset purchases

  5. Risks/issues • Euro area: extreme outcome excluded, but impact of threat on asset prices, confidence and activity included • Consumption and real incomes • Productivity • Costs, prices and margins (special survey)

  6. Money, credit and asset prices

  7. Sterling exchange rates

  8. Chart 1.9 Public term issuance by the major UK lenders

  9. Corporate credit availability by firm size(a)

  10. Commercial real estate credit availability(a)

  11. New Bank Rate tracker mortgage rate, Bank Rate and an estimate of banks’ marginal funding cost

  12. Nationwide house prices: annual changes to 2012 Q1

  13. Demand

  14. UK goods exports and surveys of export orders

  15. UK import penetration and relative import prices(a)

  16. Household consumption and real income

  17. Household saving ratio

  18. Business investment to GDP ratio(a)

  19. Cyclically-adjusted primary deficit

  20. Output and supply

  21. Output in 2012 Q1 compared with a quarter earlier and a year earlier

  22. ‘Normal’ seasonal shut-down periods during winter months

  23. Shut down periods over the most recent winter

  24. Public and private sector employment

  25. Whole-economy and sectoral labour productivity(a) (a) Output per hour. (b) Continuations of pre-recession trends calculated by projecting forward labour productivity from 2008 Q2 using the average quarterly growth rate between 1997 Q2 and 2008 Q1.

  26. Survey indicators of capacity utilisation by sector

  27. Why is productivity weak? Candidate stories • Labour hoarding: retain skills and anticipate recovery. Helped by bank forbearance • Tighter credit conditions: shortage of working capital, lack of finance for new/dynamic firms • Low investment and some failures/capital scrapping • Fall in hours worked → less learning by doing

  28. Services labour productivity growth by subsector(a) (a) Output per hour. Subsectors are ordered by the difference between 1998–2007 average productivity growth and 2008–2011 Q3 average productivity growth. The number in parentheses is each sector’s nominal share in 2008 services value added. Shares do not sum to 100 due to rounding.

  29. Costs and prices

  30. CPI, RPI and RPIX inflation

  31. Contributions to CPI inflation(a)

  32. Contributions to private sector unit labour costs

  33. Corporate profit share (excl financial corporations and oil)

  34. Economic Outlook Peter Andrews Agent for Greater London, Bank of England Construction Industry Council 23 May 2012

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