Download Costs and prices - Bank of England

Inflation Report
November 2012
Costs and prices
Chart 4.1 Contributions to CPI inflation(a)
(a) Contributions to annual CPI inflation. Data are non seasonally adjusted.
(b) Calculated as a residual. Includes a rounding residual.
Chart 4.2 Sterling oil and wholesale gas prices
Sources: Bank of England, Bloomberg, Thomson Reuters Datastream and Bank calculations.
(a) Brent forward prices for delivery in 10–21 days’ time converted into sterling.
(b) One-day forward price of UK natural gas.
(c) The futures prices shown are averages during the fifteen working days to 1 August 2012 (dashed lines) and 7 November 2012 (dotted lines). The sterling oil futures curve is
calculated by assuming that the sterling-dollar exchange rate remains at its average level during those respective fifteen-day periods.
Chart 4.3 Measures of monthly CPI inflation excluding VAT(a)
Sources: ONS and Bank calculations.
(a) The swathes contain a range of estimates based on three different levels of aggregation. These are: headline CPI, twelve main divisions and 39 main groups. All estimates exclude the
estimated impact of changes in VAT. X-12 is used to seasonally adjust these headline, division and group indices since 1996. Division and group indices are re-weighted into a
headline index using weights in the consumer price basket. In addition, alternative measures are obtained by only seasonally adjusting those divisional or group indices that
are found to display seasonal variation before re-weighting. See the box on page 33 of the May 2012 Inflation Report for more details.
Chart 4.4 US dollar food commodity prices(a)
Sources: S&P indices and Thomson Reuters Datastream.
(a) Calculated using S&P US dollar commodity price indices.
(b) Including grain prices.
Chart 4.5 Sterling food prices
Sources: Bank of England, ONS, S&P indices, Thomson Reuters Datastream and Bank calculations.
(a) The latest observation is September 2012.
(b) Monthly average of daily S&P US dollar commodity price index, converted into sterling using the monthly average of market exchange rates. The latest observation is October 2012.
Chart 4.6 UK import prices and foreign export prices
excluding oil
Sources: Bank of England, CEIC, Eurostat, ONS, Thomson Reuters Datastream and Bank calculations.
(a) Domestic currency export prices of goods and services of 45 countries weighted according to their shares in UK imports, divided by the average sterling effective exchange rate index
over the quarter. The sample does not include any major oil exporters. The observation for 2012 Q2 is an estimate. In 2012 Q2, export prices for Pakistan are assumed to grow at their
2012 Q1 rate.
(b) Domestic currency export prices of goods and services of 45 countries, as defined in footnote (a).
(c) Goods and services excluding fuels deflator, excluding the impact of MTIC fraud.
Chart 4.7 Private sector unit labour costs(a)
Sources: ONS and Bank calculations.
(a) Calculated using private sector average weekly earnings data, adjusted using the ratio of private sector employee compensation to wages and salaries, divided by market sector
output per worker. Private sector employee compensation is calculated as whole-economy compensation less central government and local authority compensation, the latter two of
which have been seasonally adjusted by Bank staff.
Chart 4.8 Private sector corporate profit share
Sources: ONS and Bank calculations.
(a) A recession is defined as at least two consecutive quarters of falling output (at constant market prices) estimated using the latest data. The recession is assumed to end once output
began to rise.
(b) Private sector corporates’ gross trading profits (excluding the alignment adjustment), divided by nominal gross value added at basic prices, excluding general government gross operating
surplus and central government and local authority compensation of employees. Central government and local authority compensation data have been seasonally adjusted by
Bank staff.
Chart 4.9 Inflation and households’ inflation perceptions and
expectations one year ahead
Sources: Bank of England, GfK NOP and ONS.
(a) The questions ask about perceived and expected changes in prices, but do not reference a specific price index. Measures are based on the median estimated price change.
Tables
Table 4.A Private sector earnings(a)
Sources: Bank of England, Incomes Data Services, Industrial Relations Services, the Labour Research Department and ONS.
(a)
(b)
(c)
(d)
Based on quarterly data unless otherwise stated.
Data in the two months to August.
Average over the past twelve months, based on monthly data.
Percentage points.
Table 4.B Indicators of longer-term inflation expectations(a)
Sources: Bank of England, Barclays Capital, Bloomberg, Citigroup, GfK NOP, HM Treasury, YouGov and Bank calculations.
(a)
(b)
(c)
(d)
(e)
(f)
Data are non seasonally adjusted.
Since 2009 Q1 for Bank/NOP data. Since 2008 Q3 for Barclays Basix data.
YouGov/Citigroup data are for October. RPI implied from swaps data are the average from 1 October to 7 November.
The questions ask about expected changes in prices, but do not reference a specific price index. Measures are based on the median estimated price change.
Taken from Forecasts for the UK economy: a comparison of independent forecasts. Based on the average of medium-term projections.
Five-year, five-year forward RPI inflation implied from swaps.