Transcript Slide 1

ONS Economic Forum
Email: [email protected]
Twitter: @ONS
#ONSeconomy
Website: http://www.ons.gov.uk/ons/about-ons/getinvolved/events/events/economic-forum/index.html
15 January 2015
1
What’s new
Peter Patterson, Deputy Chief Economic Adviser
ONS Economic Forum
15 January 2015
2
What’s new - outline
• Latest ONS economic statistics, including
quarterly national accounts
• New quarterly release on indicators of
economic well-being
• NA measure of living standards - relationship
between RHDI and GDP growth
• Variations in the inflation experience of UK
households
3
Sharp fall in inflation to 0.5%, record
low
% changes on a year earlier
7
6
5
4
3
2
1
0
-1
CPI all items
CPI goods
-2
CPI services
-3
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN
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GDP growth stabilised in 2.5-3%
annual range during past year
% changes on same quarter of previous year
3.5
QNA
3.0
Second Estimate
2.5
2.0
1.5
1.0
0.5
0.0
2010 Q2
Q1
Q3
Q4 2011 Q2
Q1
Q3
Q4 2012 Q2
Q1
Q3
Q4 2013 Q2
Q1
Q3
Q4 2014 Q2
Q1
Q3
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Revisions to three measures of GDP
Revisions to year-on-year growth rates of different estimates of GDP, percentage points
0.4
0.2
0
-0.2
Expenditure
-0.4
Income
-0.6
Output
-0.8
Average
-1
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
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Mean revisions to GDP growth
estimates
Percentage points
4 time intervals:
M5_P 5 mths
Y1_P 1 year
Y2_P 2 years
Y3_P 3 years
Source: OECD
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Services maintain the momentum of
growth
Index nos, 2011=100
110
105
100
95
Services
Production
90
Construction
Manufacturing
85
2011 JAN
2011 JUL
2012 JAN
2012 JUL
2013 JAN
2013 JUL
2014 JAN
More than half of growth in services output (or 70% of cumulative GDP growth) since 2011 is due to 3 sectors:
•Other professional service activities
•Admin & support service activities
•Real estate activities
2014 JUL
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Sectoral financial balances
Net lending/borrowing by sector, % of GDP
8
6
4
2
0
-2
-4
-6
Public sector
-8
Households
Companies
-10
Overseas
-12
-14
1997 Q1
1999 Q1
2001 Q1
2003 Q1
2005 Q1
2007 Q1
2009 Q1
2011 Q1
2013 Q1
9
UK current account deficit
% of nominal GDP
8
6
4
2
0
-2
-4
-6
-8
-10
-12
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Total secondary income balance
Total primary income balance
Trade in goods balance
Current account balance
Trade in services balance
10
Primary income balance
% of GDP
5.0
4.0
3.0
2.0
Earnings on debt
securities
Earnings on equity
securities
Direct investment
1.0
Other investment
0.0
Other primary income
-1.0
-2.0
Total primary income
balance
-3.0
-4.0
1997 Q1 1999 Q1 2001 Q1 2003 Q1 2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1
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Economic Well-being Q3 2014
• Traditional measures of progress such as GDP are increasingly
considered an incomplete picture of the state of the nation.
• First of regular quarterly bulletins to coincide with QNA.
• Economic Well-being provides a fuller understanding of the
economy & how it impacts on national well-being
• To give a more rounded and comprehensive basis for
assessing changes in material well-being
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GDP, GDP per head and NNDI per head
Q1 2000 = 100
135.00
130.00
125.00
120.00
115.00
110.00
Gross Domestic Product (GDP)
105.00
GDP per head
100.00
Real Net National Disposable Income (RNNDI) per head
95.00
90.00
2000
Q1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Q3
Q3
Q3
Q3
Q3
Q3
Q3
Q3
Q3
Q3
Q3
Q3
Q3
Q3
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GDP and household income per head
2000 Q1 =100
125
120
115
110
105
GDP per head
RHDI per head
100
95
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
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Cumulative contributions to growth
since 2007 – GDP and RHDI
Percentage
points
40
Percentage
points
40
GDP
RHDI
GDP = £1,618bn in 2011
RHDI = £1,068bn in 2011
30
30
20
20
10
10
0
0
-10
-10
-20
-20
-30
-30
2007
2008
2009
2010
2011
2012
2013
Inflation
Taxes on Products and Production
Other Income
Gross Operating Surplus
Compensation of Employees
GDP
2014
2007
2008
2009
2010
Inflation
Net Social Benefits
Net social contributions
Gross Operating Surplus
RHDI
2011
2012
2013
2014
Other
Taxes
Net property income
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Compensation of Employees
Variation in the inflation experience of
UK households
• Developed alongside the Johnson Review, this paper is one response to
their second recommendation: the regular publication of inflation indices
for sub-groups in the UK
• Uses micro-level expenditure data and detailed price indices to estimate
inflation rates for:
o Expenditure and income deciles
o Households with and without children
o Retired and non-retired households
• Published 15th December 2014, it is the first UK paper to do this on a CPI
consistent basis
• Full methodology and supporting documents available online, headline
results presented here
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Lower income households have experienced higher inflation
rates ...
Note: 1= lowest income, 10= highest income
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... as have lower expenditure households
Note: 1= lowest expenditure, 10= highest expenditure
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Retired households have experienced higher price increases than
non-retired households...
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... mostly because of Energy & Fuel costs
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Headline results, average inflation
2003 - 2013
%
Inflation
Group
Decile of
1
2
9
10
Disposable Income
2.9
2.7
2.5
2.6
Expenditure
3.7
3.3
2.3
2.3
Households with Children
2.4
Households without Children
2.7
Retired Households
2.8
Non-Retired Households
2.5
CPI
2.6
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