1. UK Economic Outlook Solihull Business Forum – 29 th October 2012 Glynn Jones West Midlands Agency

3. The Current Economic Position West Midlands Agency GDP and inflation forecasts GDP projection based on market interest rate expectations and £375 billion asset purchases

4. The Current Economic Position West Midlands Agency GDP and inflation forecasts CPI inflation projection based on market interest rate expectations and £375 billion asset purchases

5. Global Outlook

6. The Current Economic Position West Midlands Agency GDP in selected countries and regions Sources: Eurostat, Indian Central Statistical Organisation, Instituto Brasileiro de Geografia e Estatística, National Bureau of Statistics of China, Thomson Reuters Datastream and US Bureau of Economic Analysis. (a)Real GDP measures (b)Non seasonally adjusted.

7. The Current Economic Position West Midlands Agency Euro-area bond yields Selected European ten-year government bond yields (a) Source: Bloomberg. (a)Yields to maturity on ten-year benchmark government bonds.

8. The Current Economic Position West Midlands Agency Trade performance Ratios of UK exports to UK-weighted rest of G7 imports (a) Sources: Eurostat, Japan Cabinet Office, ONS, Statistics Canada, Thomson Reuters Datastream, US Bureau of Economic Analysis and Bank calculations. (a)Chained-volume measures of UK goods (services) exports divided by real imports of goods (services) in Canada, France, Germany, Italy, Japan and the United States, weighted using UK 2011 goods (services) export shares from the 2012 Pink Book. UK goods exports data have been adjusted for MTIC fraud by an amount equal to the ONS’s goods imports adjustment.

9. Domestic Outlook

10. The Current Economic Position West Midlands Agency Demand & Output GDP and sectoral output (a) (a)Chained-volume measures. GDP is at market prices. Indices of sectoral output are at basic prices.

11. The Current Economic Position West Midlands Agency Demand & Output Business investment

12. The Current Economic Position West Midlands Agency Demand & Output Real household consumption and income & Savings Ratio (a)Includes non-profit institutions serving households. (b)Total available household resources, deflated by the consumer expenditure deflator. (c)Chained-volume measure.

13. The Current Economic Position West Midlands Agency Supply & Productivity Output & Private Sector Employment

14. The Current Economic Position West Midlands Agency Supply & Productivity Whole-economy and sectoral labour productivity

15. The Current Economic Position West Midlands Agency Supply & Productivity Regional economies: the West Midlands

16. Costs & Prices

17. The Current Economic Position West Midlands Agency Costs & Prices Consumer Price Inflation

18. The Current Economic Position West Midlands Agency Costs & Prices US dollar oil and commodity prices

19. The Current Economic Position West Midlands Agency Costs & Prices Corporate profit share (excluding financial corporations and the oil sector)

20. The Current Economic Position West Midlands Agency Costs & Prices Private sector pay settlements (a) Sources: Bank of England, Incomes Data Services, Industrial Relations Services, the Labour Research Department and ONS. (a) Three-month mean.

21. Summary

22. Monetary Policy Exceptionally low interest rates Quantitative easing FPC recommendation on liquidity buffers Extended Collateral Term Repo (ECTR) Finance for Lending Scheme Monetary Policy West Midlands Agency

23. Inflation Report - May 2012 www.bankofengland.co.uk/publications/inflationreport/index.htm

24. Stylised transmission mechanism for asset purchases

25. Funding for Lending Scheme Net Lending 0.25% 0.5% - 1.5% 5% of existing loans + new net lending 5% of existing loans AMOUNT FEE

26. Whilst reports of production ‘on-shoring’ continue, they are for the most part modest Modest rise in repatriation of production In services off-shoring continues Key drivers: 1.Rising production & transport costs 2.Quality 3.Diversify supply chains Impact – low volume, high value-added Where firms have moved supply from the Far East, it more often to low labour cost centres in Europe

27. Many manufacturers express concerns over supply chain and skills capacity