Inflation Report November 2006

Demand

Chart 2.1 Nominal GDP and domestic demand (a) (a) At current market prices.

Chart 2.2 Household spending on energy (a) (a) Bank estimates. Energy is defined as electricity, gas and other fuels plus vehicle fuels and lubricants.

Chart 2.3 Investment intentions from Agents’ scores (a) Calculated as differences from averages since July For the underlying Agents’ scores, a score of zero indicates that UK investment spending over the next twelve months is expected to be unchanged, compared with current spending, and a positive (negative) score indicates investment spending is expected to be higher (lower) than current spending.

Chart 2.4 World GDP (a) Source: IMF World Economic Outlook Database September (a) Volume measure using purchasing power parity exchange rates is an IMF forecast.

Chart 2.5 US home sales and residential investment Sources: Bureau of Economic Analysis and Thomson Financial Datastream. (a) Chained-volume measure. (b) Sales of existing single-family homes.

Chart 2.6 UK goods exports and imports (a) (a) Chained-volume measures. (b) Including estimated missing trader intra-community (MTIC) fraud. (c) Excluding fraud adjustments.

Tables

Table 2.A Expenditure components of demand (a) (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. Percentage changes on a quarter earlier Averages Q3 Q4Q1Q2 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) Real GDP at market prices

Table 2.B Indicators of retail sales growth Sources: Bank of England, BRC, CBI and ONS. (a) Averages of monthly data. October figures are averages of the three months to October. (b) Balance of retailing respondents in the CBI Distributive Trades Survey reporting sales higher than a year earlier. (c) A score of zero indicates that retail sales values were unchanged in the latest three months compared to a year earlier. A positive (negative) score indicates retail sales were higher (lower) than a year earlier. Averages Q1Q2Q3Oct. Retail sales volumes, growth on a quarter earlier ONS n.a. Retail sales values, growth on a year earlier (a) BRC (total) BRC (like-for-like) Balances/scores (a) CBI (b) Agents (c) n.a.

Table 2.C GDP in the major economies (a) Sources: Eurostat, Japanese Cabinet Office and US Bureau of Economic Analysis. (a) Chained-volume measures. Percentage changes on a quarter earlier Averages Q3Q4Q1Q2Q3 Euro area n.a. of which:Germany n.a. France n.a. Italy n.a. United States Japan n.a.

Table 2.D Export orders (a) Sources: BCC, CBI and CIPS/RBS. (a) Percentage balances of respondents reporting ‘higher’ relative to ‘lower’ export orders, except CIPS/RBS where a reading above 50 suggests increasing orders, and below 50 suggests falling orders. (b) Averages since 1989 for BCC, 1972 for CBI Quarterly Industrial Trends and 1996 for CIPS/RBS. (c) Average of monthly indices. (d) Optimism about export prospects for the next twelve months. Series averages (b) AveragesQ1Q2Q3Oct. Manufacturing BCC orders n.a. CIPS/RBS orders (c) CBI orders n.a. CBI optimism (d) n.a. Services BCC orders n.a.