annual uk gdp growth: nominal vs real - omfif · annual uk gdp growth: nominal vs real how nominal...

Annual UK GDP growth: Nominal vs Real

How nominal GDP growth has fluctuated between policy regime periods

1965-2016

Source: ONS

-7

-2

3

8

13

18

23

28

1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

Real GDP growth Nominal GDP growth Average nominal GDP growth over relevant period

B F GA HC D E

Key Policy regime Period Mean growth

Std. deviation of growth

A Bretton Woods 1946-72 9.5 2.8 B ‘Snake’ currency band 6 weeks - - C Sterling free float 1972-76 17.8 6.0 D Monetary targets 1976-87 13.0 4.5 E Forms of exchange rate targeting 1987-90 11.2 1.2 F ERM 1990-92 5.8 2.5 G Inflation targeting: 1-4% band of RPIX 1992-2004 5.1 1.0 H Inflation target adjustment: 2% CPI rate 2004- 3.3 2.5

The standard deviation is a measure of the dispersion of a set of data from its mean - implying volatility. A higher standard deviation infers data points are further from the mean, thus a greater deviation within the data set. In our case, we estimate this dispersion within each separate regime period shown in the table, right.