Economic Update Peter Andrews Agency for Greater London Bank of England November 2011

Agency for Greater London Prospects for activity and inflation

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

Agency for Greater London Chart 1.1 Bank Rate and forward market interest rates

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

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

Agency for Greater London Money and asset prices

Agency for Greater London Chart 1.3 Selected European ten-year spot government bond yields

Agency for Greater London Chart 1.8 UK banks’ longer-term funding spreads

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.

Agency for Greater London Chart 1.10 Loans to UK businesses by size

Agency for Greater London Corporate credit availability by firm size Credit Conditions Survey, Oct 2011

Agency for Greater London Household secured credit availability (a)

Agency for Greater London RICS: regional house prices over past 3 months

Agency for Greater London Demand, output, capacity and employment

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.

Agency for Greater London Chart 2.11 Household consumption and real income

Agency for Greater London Chart 2.9 Contributions of expenditure components to changes in demand in recessions and recoveries

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.

Agency for Greater London Agents’ construction scores

Agency for Greater London Chart 3.9 Survey measures of capacity utilisation Chart 3.8 Labour productivity

Agency for Greater London Chart 3.4 Public and private sector employment

Agency for Greater London Change in LFS unemployment rate (three months to August 2011 compared with three months to August 2010)

Agency for Greater London Costs and prices

Agency for Greater London Chart 4.2 Direct contribution of energy prices to CPI inflation and Bank staff’s central estimate of VAT contribution

Agency for Greater London Chart 4.5 Dollar oil and industrial metals prices

Agency for Greater London Chart 4.8 Measures of domestically generated inflation

Economic Update Peter Andrews Agency for Greater London Bank of England November 2011

Agency for Greater London Chart 2.14 Public sector net borrowing(a) Sources: HM Treasury, Office for Budget Responsibility (OBR) and ONS. (a) Measures exclude the temporary effects of financial interventions. (b) Projections come from the OBR’s March 2011 Economic and Fiscal Outlook (EFO).