a dip in sentiment about the economy
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A dip in sentiment about the economy. Borrowing . Is Hungary the next to feel the contagion?. The fall and rise of the UK savings ratio. Property prices affect consumer confidence. A Choppy Recovery?. The Bank is in no hurry to lift policy rates. Cyclical Unemployment in the UK. - PowerPoint PPT PresentationTRANSCRIPT
A dip in sentiment about the economy
Expectations over next 12 months, % balance of optimists over pessimists
Confidence influences behaviour
Source: Reuters EcoWin
06 07 08 09 10
-60
-50
-40
-30
-20
-10
0
10
20
Net
bal
ance
-60
-50
-40
-30
-20
-10
0
10
20
General state of the economy
Likely to make major purchases
People's Own Financial Situation
Borrowing
Annual percentage change in consumer borrowing in the UK
Annual Growth of Consumer Borrowing
Source: Bank of England
98 99 00 01 02 03 04 05 06 07 08 09 10
-2.5
0.0
2.5
5.0
7.5
10.0
12.5
15.0
17.5
20.0
Per
cent
-2.5
0.0
2.5
5.0
7.5
10.0
12.5
15.0
17.5
20.0
Consumer credit
Lending secured on property
Is Hungary the next to feel the contagion?
Forint per Euro
Hungarian Forint against the Euro
Source: Reuters EcoWin
Jan
08
Apr Jul Oct Jan
09
Apr Jul Oct Jan
10
Apr Jul
220
230
240
250
260
270
280
290
300
310
320
EU
R/H
UF
220
230
240
250
260
270
280
290
300
310
320
The fall and rise of the UK savings ratio
Percentage of disposable income that is saved, quarterly data
UK Household Savings Ratio
Source: UK Statistics Commission
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Per
cent
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Property prices affect consumer confidence
index of confidence (top pane) and average prices per month (bottom pane)
UK House Prices & Confidence
Source: HBoS House Price Index and EcFin Consumer Confidence Data
04 05 06 07 08 09 10
80000
100000
120000
140000
160000
180000
200000
Ave
rage
pric
e in
£s
80000
100000
120000
140000
160000
180000
200000
Average House Price for UK (Halifax house price data)
-40
-30
-20
-10
0
Inde
x of
con
fiden
ce
-40
-30
-20
-10
0
Consumer confidence indicator (fall indicates lower confidence)
A Choppy Recovery?
Annual percentage change in GDP at constant prices
Growth in UK National Output
Source: UK Statistics Commission
90 92 94 96 98 00 02 04 06 08 10 12
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
Per
cent
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
The Bank is in no hurry to lift policy rates
Per cent
UK CPI Inflation and Policy Interest Rates
Source: Reuters EcoWin
06 07 08 09 100
1
2
3
4
5
6
Per
cent
0
1
2
3
4
5
6
Consumer Price Inflation
Base Interest Rates
Cyclical Unemployment in the UK
Annual % change in GDP and short term unemployment
The recession leaves many out of work
Source: Reuters EcoWin
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
05 06 07 08 09 10
-6
-4
-2
0
2
4
Per
cent
-6
-4
-2
0
2
4
Annual growth of real GDP
mill
ions
0.9
1.1
1.3
1.5
Per
son
(mill
ions
)
0.9
1.1
1.3
1.5
Out of work for less than 6 months
How much will the Yuan be allowed to rise?
Chinese Yuan /US Dollar exchange rate and balance of trade in goods
Yuan-Dollar Exchange Rate and China-US Trade
Source: Reuters EcoWin
02 03 04 05 06 07 08 09 10
6.00
6.50
7.00
7.50
8.00
8.50
CN
Y/U
SD
6.00
6.50
7.00
7.50
8.00
8.50
China US $ exchange rate, Yuan per $1
The fixed exchange rate ended in July 2005
billi
ons
-30
-24
-18
-12
-6
0
US
D (
billi
ons)
-30
-24
-18
-12
-6
0
US trade balance with China ($bn per month)
The surge in China’s foreign exchange reserves
US dollars, billions
China's Trade Surplus and Reserves
Source: International Monetary Fund
97 98 99 00 01 02 03 04 05 06 07 08 09
billi
ons
0
100
200
300
400
US
Dol
lars
(bi
llion
s)
0
100
200
300
400
China's Current Account Balance
thou
sand
bill
ions
0.00
0.50
1.00
1.50
2.00
2.50
US
D (
thou
sand
bill
ions
)
0.00
0.50
1.00
1.50
2.00
2.50
China's Reserves of Foreign Currency
High (but volatile) world cocoa prices
US dollars per tonne, Daily price
World Cocoa Prices
Source: Reuters EcoWin
Jan
06
Apr Jul Oct Jan
07
Apr Jul Oct Jan
08
Apr Jul Oct Jan
09
Apr Jul Oct Jan
10
Apr Jul
1250
1500
1750
2000
2250
2500
2750
3000
3250
3500
3750
US
D/T
on (
met
ric)
1250
1500
1750
2000
2250
2500
2750
3000
3250
3500
3750
Fears of rising unemployment
Net % balance of people expecting higher unemployment in the next year
Unemployment Expectations
Source: Reuters EcoWin
05 06 07 08 09 10
10
20
30
40
50
60
70
80
Net
bal
ance
10
20
30
40
50
60
70
80
Fewer vacancies for job seekers
Three month average, seasonally adjusted
Unfilled Vacancies in the UK Labour Market
Source: Reuters EcoWin
01 02 03 04 05 06 07 08 09 10
400000
450000
500000
550000
600000
650000
700000
Num
ber
of
400000
450000
500000
550000
600000
650000
700000
Bank Agents report weak labour demand
Employment intentions in various sectors of the economy
Bank of England Regional Agents - Employment Survey
Business services
Consumer services
Manufacturing
Source: Reuters EcoWin
05 06 07 08 09 10
-4
-3
-2
-1
0
1
2
3
Net
bal
ance
-4
-3
-2
-1
0
1
2
3
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