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Economic Indicators
Philip Brien
Economic Indicators
31 August 2021
Economic Summary, August 2021
1. Headline UK Economic Indicators, August 2021
2. Headline Indicators summary
3. Introduction to Economic Indicators
A. Growth and Output
Gross Domestic Product
GDP - International Comparisons
Components of GDP
Productivity
Services
Manufacturing
B. Price and Wages
Inflation
Inflation: International
Average Earnings
C. Labour Market
Employment
Unemployment - National
Unemployment - International Comparisons
D. Finance and Borrowing
Interest Rates and Monetary Policy
Public finances
Financial Indicators
E. Trade and Exchange Rates
Trade
Exchange rates
F. Other Indicators
Business and Consumer Confidence
Retail Sales
Housing Market
Household Debt
4. GlossaryEconomic Indicators Number 09040 Disclaimer The Commons Library does not intend the information in our research publications and briefings to address the specific circumstances of any particular individual. We have published it to support the work of MPs. You should not rely upon it as legal or professional advice, or as a substitute for it. We do not accept any liability whatsoever for any errors, omissions or misstatements contained herein. You should consult a suitably qualified professional if you require specific advice or information. Read our briefing ‘Legal help: where to go and how to pay’ for further information about sources of legal advice and help. This information is provided subject to the conditions of the Open Parliament Licence. Feedback Every effort is made to ensure that the information contained in these publicly available briefings is correct at the time of publication. Readers should be aware however that briefings are not necessarily updated to reflect subsequent changes. If you have any comments on our briefings please email papers@parliament.uk. Please note that authors are not always able to engage in discussions with members of the public who express opinions about the content of our research, although we will carefully consider and correct any factual errors. You can read our feedback and complaints policy and our editorial policy at commonslibrary.parliament.uk. If you have general questions about the work of the House of Commons email hcenquiries@parliament.uk. 2 Commons Library Economic Indicators, 31 August 2021
Economic Indicators Contents Economic Summary, August 2021 4 1 Headline UK Economic Indicators, August 2021 8 2 Headline Indicators summary 9 3 Introduction to Economic Indicators 11 4 Glossary 34 3 Commons Library Economic Indicators, 31 August 2021
Economic Indicators Economic Summary, August 2021 As restrictions have eased across the UK, and support measures start to wind down, many economic indicators are showing the UK performing well at the end of August. But staff shortages due to Covid-19 and supply chain issues continue to affect the services and manufacturing industries. Economy on track to make up lost ground The UK’s GDP fell by 9.8% in 2020, the steepest drop since consistent records began in 1948. However, it has been growing strongly in recent months, with an increase of 4.8% in April to June 2021, compared to the previous three months. It’s not clear when the UK’s economic activity will reach pre-pandemic levels, but analysis published by the Financial Times suggests that it is entirely possible that this will happen before the end of 2021. This growth has been good news for the public finances, with Government borrowing well below the Office for Budget Responsibility’s (OBR) forecasts. The Government borrowed £78 billion between April and July 2021. This was £62 billion less than during the same period last year and well below the OBR’s forecasts from March 2021 (as shown in the chart below). This may leave the Chancellor with more room to manoeuvre in the autumn Spending Review. 4 Commons Library Economic Indicators, 31 August 2021
Economic Indicators
Government borrowing in 2021/22 so far is lower than the OBR's forecast
£ billions, cumulative public sector net borrowing in the financial year
234
OBR forecast, March 2021 215
204 206
Actual borrowing 187
170
152
126
104
88
78
62 68
46
33 26
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Source: ONS series J5II, OBR Economic and fiscal outlook monthly profiles, July 2021
Inflation this month was surprisingly low given the scale of the recovery, at
2.0%. However, this may be partly linked to prices rising this time last year
(as restrictions from the first lockdown were eased), and most forecasters
think that inflation is likely to temporarily rise again towards the end of the
year.
Labour market remains strong as the furlough
scheme begins to unwind
The labour market remains in a strong position, at least for now. The number
of job vacancies was at a record high of 953,000 in May-July, while the
number of employees on payroll has continued to increase.
Official employment and unemployment figures also show the UK is in a
strong position. The employment rate rose and the unemployment rate fell
between April and June 2021.
For people aged 16 to 24, the rise in employment has been particularly strong.
This age group experienced a large fall in employment rates at the start of
the pandemic.
5 Commons Library Economic Indicators, 31 August 2021Economic Indicators
Young people saw the biggest decreases in employment rates in the pandemic
Percentage point change in employment rate for age band, compared with Jan-Mar 2020
2
Age 25-34 Age 35-49
0
-2 Age 65+
Age 50-64
-4
Age 18-24
-6
-8 Age 16-17
-10
-12
Jan-Mar 2020 Apr-Jun 2020 Jul-Sep 2020 Oct-Dec 2020 Jan-Mar 2021 Apr-Jun 2021
Source: ONS, Labour Force Survey table A05 SA
Since the start of July, the Coronavirus Job Retention Scheme (CJRS, often
called the furlough scheme) has been winding down.
Grants under the CJRS covered only 70% of an employee’s wages (down from
80%) from 1 July and this fell to 60% on 1 August. The scheme is due to close
at the end of September. The effect this will have on employment is unknown
but as of 30 June 2021, there were still 1.9 million jobs on furlough.
Independent forecasts compiled by HM Treasury currently predict an
unemployment rate of between 4.8% and 6.0% in October to December this
year, above the current 4.7%.
Supply and staff shortages dampen growth
Among all the optimism of this month’s data releases, there is still room for a
note of caution.
Purchasing Managers’ Indices (PMI) for both the services and manufacturing
sectors fell slightly in August, suggesting the expansion of both sectors is not
as strong as it has been. Respondents to the PMI surveys cite staff shortages
due to Covid-19 and supply chain issues as the main areas of concern, and
both could continue to restrict growth.
6 Commons Library Economic Indicators, 31 August 2021Economic Indicators
Services and manufacturing PMIs have both fallen recently
IHS Markit Purchasing Managers' Index score, UK
70
60
Manufacturing Expanding
50
Contracting
40
Services
30
20
10
0
Jan 2020 Apr 2020 Jul 2020 Oct 2020 Jan 2021 Apr 2021 Jul 2021
Source: IHS Markit, Purchasing Managers’ Index data, UK
Business and consumer confidence also appears to have cooled slightly.
Output expectations from the Confederation of British Industry’s Industrial
Trends Survey fell in August, as did analytics company GfK’s Consumer
Confidence Index. However, it is worth noting both measures are around or
above their pre-pandemic levels.
Overall, there is much to be cheerful about as Parliament prepares to return
from its summer break. However, it may not all be plain sailing as we head
into the autumn; it might not just be the weather that begins to cool over the
next few months.
7 Commons Library Economic Indicators, 31 August 2021Economic Indicators
1 Headline UK Economic Indicators,
August 2021
Gross Domestic Product: Q2 2021, Seasonally Adjusted
Change (real %) 4.8 (qtr) 22.2 (yr Q2 20-Q2 21)
Industries
Service output: 3 months to June 2021
Change (%) 5.7 (qtr) 21.0 (yr)
Manufacturing output: 3 months to June 2021
Change (%) 1.8 (qtr) 26.3 (yr)
Productivity: Q2 2021
Output per hour
Change (%) -0.5 (qtr) 3.1 (yr)
Inflation: July 2021
Change on year (%) 2.0 (CPI) 3.8 (RPI)
Labour Market: Apr-Jun 2021, Seasonally Adjusted
Unemployment
Unemployment Rate (% of economically active) 4.7
Change (% points) -0.2 (qtr) 0.6 (yr)
Employment
Employment Rate (% aged 16-64 in work) 75.1
Change (% points) 0.3 (qtr) -0.7 (yr)
Interest Rate: as of 5 August 2021
Bank of England Base Rate 0.1 (%)
Public Finances: 2020/21
Net borrowing 298 (£ bn) 14.2 (% GDP)
Net debt 2,137 (£ bn) 97.2 (% GDP)
Trade: Q1 2021
Current Account -12.8 (£ bn) -2.4 (% GDP)
Sterling Exchange rate: as of 26 August 2021
US Dollar ($) 1.37 (rate) 3.9% (% change on yr)
Euro (€) 1.17 (rate) 4.4% (% change on yr)
ONS Business Impacts of Coronavirus Survey: August 2021
% respondents with high or moderate confidence their 83.2
business would survive the next 3 months
Retail Sales: July 2021, Seasonally Adjusted, 3 month average
Quantity of retail sales (volume) 11.1 (% change on yr)
Housing Market: June 2021, Seasonally Adjusted
House Price Index (ONS)
Change (%) 4.2 (mth) 13.2 (yr)
See each indicator page for information on the sources used in this table.
8 Commons Library Economic Indicators, 31 August 2021Economic Indicators
2 Headline Indicators summary
GDP grew by 4.8% in April-June 2021 compared to the previous three-month
period (January-March). This compares to growth of 2.0% in the Eurozone in
Q2 2021.
Services output was up by 21.0% in the three months to June 2021 compared
to the previous year. Manufacturing output rose by 26.3%.
CPI inflation was 2.0% in July 2021, down from 2.5% in June. Inflation in the
Eurozone was 2.2% in July, up from 1.9% in June.
The Bank of England’s Monetary Policy Committee (MPC) left interest rates
unchanged at 0.1% on 5 August, the lowest they have ever been, following a
cut from 0.25% on 19 March 2020.
Average wages excluding bonuses were 7.4% higher in the three months to
June 2021 compared with the year before. CPI inflation for this period was
2.0%.
32.28 million people were in employment in April-June 2021, down 329,000
from a year before. The employment rate was 75.1%, down from 75.7% the
previous year.
1.60 million people were unemployed in April-June 2021, an increase of
193,000 from the year before. The unemployment rate was 4.7%. The UK
harmonised unemployment rate for Q1 2021 was 4.9%, above the rate of
Germany (3.9%) but below that of the US (6.2%) and France (8.0%).
Productivity across the whole UK economy fell by 0.5% in the flash estimate
for Q2 2021 compared with the previous quarter. Compared with the previous
year, it was up by 3.1%.
Government borrowing in April-July 2021 was £78 billion, £62 billion less than
the equivalent period in 2020/21. At the end of July 2021, public sector net
debt was equivalent to 98.8% of GDP, compared with 83.4% before the
pandemic in February 2020.
The UK had a trade deficit of £4.4 billion in the three months to June 2021,
compared with a £1.8 billion deficit in the previous three months. The current
account deficit was £12.8 billion in Q1 2021 (2.4% of GDP), down from £26.3
billion in Q4 2020 (4.8% of GDP).
9 Commons Library Economic Indicators, 31 August 2021Economic Indicators The value of sterling fell by 0.2% between June and July, following an increase of 0.1% between May and June. Compared with a year ago, it is 6.4% higher. The volume of retail sales increased by 5.2% in the three months to July 2021 compared with the previous three months, and increased by 11.1% compared with the previous year. GfK’s Consumer Confidence Index, which measures consumer attitudes, was at -8 in August 2021, down from -7 in July. House prices increased by 13.2% in the year to June 2021. Household debt stood at 130.2% of disposable income in Q1 2021. It has been around this level since mid-2017. 10 Commons Library Economic Indicators, 31 August 2021
Economic Indicators
3 Introduction to Economic Indicators
Economic Indicators is published once per month. Individual indicator pages
are updated more frequently as new data becomes available and are
published on the Library's webpages.
Feedback
If you have any comments or suggestions about Economic Indicators please
contact the editor, Philip Brien on x7574.
Weekly email alert
A weekly email alert with updated indicators is available to Members and
their staff on request. To subscribe, please visit the Commons Library website.
Regional Economic Indicators
A separate briefing, Regional and National Economic Indicators, is available
containing key economic data on the regions and countries of the UK,
compared to the national UK average.
Sources and glossary
Sources are listed on each indicator’s page. Economic terms, symbols and
abbreviations used in the publication are provided in Section 4.
Contacts
Members and their staff are encouraged to talk to Library subject specialists.
A comprehensive guide is available in Using the Library. Researchers are not
able to discuss pages with members of the public. For enquiries please
contact the following specialists:
11 Commons Library Economic Indicators, 31 August 2021Economic Indicators
Subject Specialist Contact
Balance of Payments Dominic Webb 2042
Businesses Georgina Hutton 2454
EU funding Philip Brien 7574
GDP Daniel Harari 2464
Employment Andrew Powell 6962
Financial Services Lorna Booth 2883
Housing Cassie Barton 2210
Incomes Daniel Harari 2464
Industries Georgina Hutton 2454
International Trade Dominic Webb/Ilze Jozepa 2042/6920
International Development Philip Brien 7574
International Economies Daniel Harari 2464
National Accounts Daniel Harari 2464
Prices and Interest Rates Daniel Harari 2464
Public Expenditure Philip Brien 7574
Taxation Matthew Keep 4324
Unemployment Andrew Powell 6962
Wages and Earnings Brigid Francis-Devine 4904
12 Commons Library Economic Indicators, 31 August 2021Economic Indicators
A1: Gross Domestic Product
GDP grew by 4.8% in April-June 2021 compared to the previous three-month
period (January-March), and grew by 1.0% in June 2021 compared to May.
Real Gross Domestic Product This was the fifth consecutive month
seasonally adjusted of growth. However, June GDP
% change on qtr % change on yr remained 2.2% below pre-pandemic
2018 … 1.3
levels in February 2020.
2019 … 1.4
2020 … -9.8 The services sector grew by 1.5% in
2020 Q2 -19.5 -21.4 June, while production fell by 0.7%
Q3 16.9 -8.5 and construction fell by 1.3%. All are
Q4 1.3 -7.3 below pre-pandemic February 2020
2021 Q1 -1.6 -6.1 levels, by 2.1% for services, 3.2% for
Q2 4.8 22.2 production and 0.3% for
Source: ONS, series: IHYP, IHYQ, IHYR construction.
All the sectors grew in April-June 2021 compared to the previous three-month
period, by 5.7% for services, 0.5% for production and 3.3% for construction.
In cash terms, GDP was £2,112 billion in 2020.
GDP growth, % change on quarter
Subject Specialist calendar quarters
20.0
Daniel Harari
10.0
Updates
ONS, GDP monthly 0.0
estimate, 10
-10.0
September 2021
-20.0
ONS, GDP first 2016 2017 2018 2019 2020 2021
quarterly estimate, 11
November 2021
Forecasts
ONS, GDP national In their March 2021 Economic and fiscal outlook, the Office for Budget
accounts, 30 Responsibility’s (OBR) forecast was 4.0% in 2021 and 7.3% in 2022.
September 2021
The Treasury’s August 2021 survey of independent forecasts showed an
HM Treasury, average forecast of 6.9% for 2021 and 5.6% for 2022.
Forecasts for the UK
economy, 15 Annual GDP growth forecasts (%)
September 2021 2021 2022
OBR forecast (Mar 21) 4.0 7.3
HM Treasury average of independent forecasts (Aug 21) 6.9 5.6
OBR, Economic and
fiscal outlook, Source:
OBR, Economic and fiscal outlook, March 2021
November 2021 HMT, Forecasts for the UK economy: a comparison of independent forecasts, July 2021
13 Commons Library Economic Indicators, 31 August 2021Economic Indicators
A2: GDP International
In Q2 2021, UK GDP grew by 4.8%, as lockdown restrictions were eased,
compared with the previous quarter (Q1 2021). Eurozone GDP increased by
2.0%, while US GDP grew by 1.6%. Compared with to the pre-pandemic peak,
UK GDP in Q2 2021 was still 4.4% lower.
GDP growth
% change in real GDP updated 12 Aug
% change on previous quarter % change on a year ago
Q3 20 Q4 20 Q1 21 Q2 21 Q3 20 Q4 20 Q1 21 Q2 21
UK 16.9 1.3 -1.6 4.8 -8.5 -7.3 -6.1 22.2
Eurozone 12.4 -0.6 -0.3 2.0 -4.0 -4.6 -1.3 13.7
Headline GDP USA 7.5 1.1 1.5 1.6 -2.9 -2.3 0.5 12.2
growth figures Japan 5.3 2.8 -1.0 .. -5.5 -1.0 -1.5 ..
across countries Germany 9.0 0.7 -2.1 1.5 -3.7 -2.9 -3.2 9.2
are not 100% France 18.8 -1.0 0.0 0.9 -3.6 -4.2 1.7 18.7
comparable during G7 9.4 1.0 0.4 .. -4.0 -3.0 -0.6 ..
the pandemic. UK OECD 9.4 1.1 0.6 .. -3.7 -2.8 -0.4 ..
Sources: OECDstat and ONS
growth is relatively
lower in 2020 – and G7 real GDP % change compared to pre-pandemic level
higher in 2021 – Q2 2021 compared with Q4 2019
*Data for Japan not yet published
2
due to differences 0.8
in how output in 0
the education and -1.1
health sectors is -2 -3.0
-3.3 -3.4
-3.8
calculated. -4 -4.4
-6
US Canada Eurozone France Germany Italy UK
Forecasts
Subject Specialist Real GDP growth forecasts In its latest report on the
Daniel Harari % change global economy,
IMF (Jul 2021) OECD (May 2021) published 27 July, the
Next updates 2020 2021 2022 2020 2021 2022 IMF raised its forecasts
OECD, OECDstat data UK -9.8 7.0 4.8 -9.8 7.2 5.5 for UK GDP growth to
France -8.0 5.8 4.2 -8.2 5.8 4.0 +7.0% in 2021, up from
on G7 growth rates
Germany -4.8 3.6 4.1 -5.1 3.3 4.4 5.3% at its previous
Eurozone -6.5 4.6 4.3 -6.7 4.3 4.4 April forecast. US GDP
IMF, World Economic US -3.5 7.0 4.9 -3.5 6.9 3.6 growth in 2021 is also
Outlook, Oct 2021 Japan -4.7 2.8 3.0 -4.7 2.6 2.0 forecast to be 7.0%,
China 2.3 8.1 5.7 2.3 8.5 5.8 boosted by large-scale
OECD, Interim India* -7.3 9.5 8.5 -7.7 9.9 8.2 fiscal support, while the
Economic Outlook, 21 Brazil -4.1 5.3 1.9 -4.1 3.7 2.5 Eurozone is forecast to
Sep 2021 World -3.2 6.0 4.9 -3.5 5.8 4.4 expand by 4.6%.
Note: *Indian forecasts are for fiscal years (April-March)
Sources: IMF World Econ. Outlook Jul'21; OECD Econ. Outlook May'21
14 Commons Library Economic Indicators, 31 August 2021Economic Indicators
A3: Components of GDP
GDP can be analysed in terms of the output produced by different industries,
or by spending by households, business and government.
GDP increased by 1.0% in June 2021 and was 2.2% below the level in February
2020 ahead of the pandemic hitting the UK economy.
GDP by Industry
Service sector Service sector growth
Index (Feb 2020 = 100) % change on previous month
10
100
0
-10
0 -20
2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
Services are the largest part of the economy – making up 79% of output in
2019. Service sector output grew by 1.5% in June 2021. It is 2.1% lower than it
was in February 2020.
Manufacturing output was up 0.2% in June, and is down 2.3% on February
2020. Manufacturing is part of the wider production sector; production sector
output fell by 0.7% in June, and is 3.2% lower than it was in February 2020.
Construction sector output was down 1.3% in June, and is down 0.3%
compared with February 2020.
GDP by Expenditure
Household spending Household spending
Index (Q4 2019 =100) % change on quarter
Subject Specialist 25
Daniel Harari 100
Updates 0
ONS, GDP monthly
estimate, 10 Sep 2021 0 -25
2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
ONS, Quarterly
national accounts, 30 Household consumption is the largest element of expenditure across the
Sep 2021 economy, accounting for 58% of the total in 2020. In Apr-Jun 2021, household
consumption was up 7.3% on the quarter, and was 7.0% below Oct-Dec 2019.
ONS, GDP first
Government consumption was up 6.1% on the quarter and investment (GFCF)
quarterly estimate,
was down 0.5%. Exports were up 3.0% and imports were up 6.5%.
UK, 11 Nov 2021
15 Commons Library Economic Indicators, 31 August 2021Economic Indicators
A4: Productivity
One of the most important factors in determining living standards over the
long term is productivity – how much output is produced for a given input
(such as an hour of work).
UK labour productivity
In the flash estimate for Q2 2021, productivity fell by 0.5% compared with the
previous quarter. Productivity was 3.1% higher in Q2 2021 than a year ago (Q2
2020). The effects of the pandemic present significant challenges in the
measurement of productivity. This likely means underlying productivity trends
will be difficult to discern for some time.
Productivity, GDP per hour Productivity level (GDP per hour)
Index where Q4 2007 level = 100
% change on qtr % change on yr
2019 .. 0.2 110
2020 .. 0.4
100
2020 Q3 6.5 4.0
Q4 -4.3 -0.7
90
2021 Q1 -4.3 -0.7
Q2* -0.5 3.1 80
Sources: ONS series TXBB, LZVD;*flash est 2000 2005 2010 2015 2020
Historically, UK labour productivity has grown by around 2% per year but
since the 2008/2009 recession it has stagnated (see chart above).
International comparisons
In 2019, ranked on GDP per hour worked, the UK came fourth highest out of
the G7 countries, with France and the US top and Japan bottom. UK
productivity was around 17% below the US and France.
Productivity (GDP per hour), 2019
Subject Specialist US$ (purchasing power parity)
Daniel Harari 80
77 77 74
60
Updates 64 61 58
ONS, UK productivity 40 47
flash estimates, 16 20
Nov 2021
0
France US Germany UK Italy Canada Japan
ONS, UK productivity
bulletin, 7 Oct 2021
Evidence from the OECD (incorporated in the data above) show that the UK’s
OECDstat, G7 labour productivity gap with the G7 average is not as great as was previously
thought, due to the different ways countries measure hours worked. The ONS
productivity levels
is exploring this research.
16 Commons Library Economic Indicators, 31 August 2021Economic Indicators
A5: Services
The service industries include the retail sector, the financial sector, the public
sector, business administration, leisure and cultural activities.
The service industries accounted for 80% of total UK economic output (Gross
Value Added) and 82% of employment in January-March 2021.
Services Output
Output - Index of Services There was an increase of 1.5% in the
PMI is based on a
% change on previous year Index of Services between May and June
monthly survey 2021.
30
asking companies 20
about output, new 10 There was an increase of 5.7% in
0 services in the three months to June
orders, stock levels, -10
2021 compared with the three months to
-20
employment and -30 March 2021.
prices. PMI 2016 2017 2018 2019 2020 2021
compares the In the three months to June 2021,
compared with the three months to June 2020, services output increased by
current month with 21.0%.
the previous one.
Purchasing Managers’ Index (PMI)
The PMI is produced UK Services PMI In the Markit/CIPS PMI, a value of 50
means that there is no change in
faster than 50 = no change
activity compared to the previous
70
comparable official 60
Expanding
month. Values above 50 indicate an
data. It often 50 expansion, and values below 50 a
40
anticipates the 30
Contracting contraction.
direction of official 20
10 The UK services PMI was 55.5 in August
figures, although 2016 2017 2018 2019 2020 2021 2021’s flash estimate, compared with
the methodology is 59.6 in July. The rate of expansion
different. continued to slow, with staff shortages and lower demand being mentioned
by respondents as possible causes; however, this was the sixth month running
in which the index stayed above 50.
Subject Specialist
Georgina Hutton
Services Output Index PMI Index
Update Index % change on yr Index Change on mth
2019 Jun 101.8 2.0 2019 Aug 50.6
ONS, Index of
2020 Jun 86.5 -15.0 2020 Aug 58.8
Services, 10
2021 Apr 97.8 24.7 2021 Jun 62.4 -0.5
September 2021 May 98.4 23.2 Jul 59.6 -2.8
Jun 99.9 15.4 Aug 55.5 -4.1
Markit/CIPS, UK
Services PMI, 3 Source: ONS, series S2KU, S222, S26Q Source: Markit/CIPS UK Services PMI
September 2021
17 Commons Library Economic Indicators, 31 August 2021Economic Indicators
A6: Manufacturing
Manufacturing is one of the production industries, which also include mining,
electricity, water & waste management and oil & gas extraction.
In 2019, the manufacturing sector accounted for 9.7% of total UK economic
output (Gross Value Added). In March 2020, it accounted for 8% of jobs.
Manufacturing Output
Total manufacturing output for the three
PMI is based on a months to June 2021 increased by 1.8%
monthly survey compared with the three months to
asking companies March 2021. For the three months to June
about output, new 2021, manufacturing output increased by
26.3%, compared with the same period
orders, stock levels, the previous year.
employment and
prices. PMI Monthly manufacturing output in June
compares the 2021 rose by 0.2% compared to May 2021. The rise was led by transport
equipment industries. Manufacturing output in June 2021 was 2.4% below
current month with pre-pandemic levels (February 2020).
the previous one.
Purchasing Managers’ Index (PMI)
The PMI is produced UK Manufacturing PMI In the Markit/CIPS PMI, a value of 50
50 = no change means that there is no change compared
faster than to the previous month. Values above 50
70
comparable official 60
Expanding indicate an expansion, and values below
data. It often 50
50 a contraction.
anticipates the 40 Contracting
The flash UK manufacturing PMI for
direction of official 30
August 2021 was 60.1, down from 60.4 in
2017 2018 2019 2020 2021
figures, although July, indicating strong expansion albeit
the methodology is at the lowest rate since March. Demand remained strong but ongoing supply
different. chain issues and staff shortages were limiting production volumes.
Subject Specialist Manufacturing output index PMI Index
Georgina Hutton Index % change on yr Index Change on mth
2019 98.2 -1.8 2019 Aug 47.4
Update 2020 88.9 -9.5 2020 Aug 55.2
ONS, Index of 2021 Apr 94.8 10.2 2021 Jun 63.9 -1.7
Production, 10 May 94.9 22.1 Jul 60.4 -3.5
September 2021 Aug 60.1 -0.3
Jun 95.1 26.3
Markit/CIPS, UK
Source: ONS, series K22A, K2JE Source: Markit/CIPS UK Manufacturing PMI
Manufacturing PMI,
01 September 2021
18 Commons Library Economic Indicators, 31 August 2021Economic Indicators
B1: Inflation
The Consumer Prices Index (CPI) is the main measure of inflation. It is
produced in line with international standards and is the measure used for the
Bank of England’s 2% inflation target. The Retail Prices Index (RPI) is no
longer classified as a National Statistic as the way it is calculated does not
meet international standards. It is included here as it is well-known and is the
longest running measure of inflation.
Price indices The CPI inflation rate was 2.0% in July
% change on a year ago 2021, down from 2.5% in June.
CPI RPI
The RPI inflation rate was 3.8% in July
2018 Jul 2.5 3.2 2021, down from 3.9% in June.
2019 Jul 2.1 2.8
2020 Jul 1.0 1.6 The fall in the CPI rate was largely driven
2021 May 2.1 3.3 by downward contributions from
Jun 2.5 3.9 recreation and culture and clothing and
Jul 2.0 3.8 footwear, partly offset by rises in transport
Source: ONS series D7G7, CZBH
prices.
4 Consumer Prices Index (CPI) 5 Retail Prices Index (RPI)
% change on year % change on year
3 4
3
2
Inflation 2
1 target
1
0 0
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2021
CPI and RPI since 1989
12
% change on year
10
RPI
8
CPI
6
Subject specialist 4
Daniel Harari 2
0
Update
-2
ONS, Consumer Price
Inflation, -4
15 September 2021 1989 1994 1999 2004 2009 2014 2019
19 Commons Library Economic Indicators, 31 August 2021Economic Indicators
B2: International Inflation
Inflation in the EU can be compared using the standard Harmonised Index of
Consumer Prices (HICP) or the CPI as it is known in the UK.
UK inflation, as measured by the CPI, was 2.0% in the year to July, down from
2.5% in June. UK inflation was 1.0% in July 2020.
EU inflation was 2.5% in July, up from 2.2% in June. EU inflation was 0.9% in
July 2020.
Inflation Inflation in the Eurozone was
Annual % change in consumer prices (HICP) 2.2% in July, up from 1.9% in
June. Eurozone inflation was
4
UK
0.4% in July 2020.
3
2
1 In Germany, inflation was 3.1% in
Eurozone
0 July, compared with 2.1% in
June.
-1
Jan-16 Jan-18 Jan-20
In France, inflation was 1.5% in
July compared with 1.9% in June.
Estonia had the highest inflation rate in the EU in July (4.9%). The lowest
inflation rate was in Malta (0.3%).
Subject specialist
Daniel Harari Inflation rates: selected countries
Annual % change in consumer prices (HICP)
Updates
2018 2019 2020 May 21 Jun 21 Jul 21
ONS, Consumer Prices
UK 2.5 1.8 0.9 2.1 2.5 2.0
Bulletin, 15 September
Eurozone 1.8 1.2 0.3 2.0 1.9 2.2
Eurostat, Harmonised
EU 1.8 1.4 0.7 2.3 2.2 2.5
Index of Consumer
France 2.1 1.3 0.5 1.8 1.9 1.5
Prices, 31 August
Germany 1.9 1.4 0.4 2.4 2.1 3.1
Source: ONS, Eurostat European Union figures exclude UK
20 Commons Library Economic Indicators, 31 August 2021Economic Indicators
B3: Average Earnings
In April 2020 median gross weekly earnings for full-time employees in the UK
were £586, around the same as in April 2019. Adjusted for inflation, median
earnings for full-time employees decreased by 0.8%.
Timelier but less detailed data show average weekly earnings for all
employees in Great Britain increased by 7.4% excluding bonuses in the three
months to June 2021 compared with the previous year. Average weekly pay
including bonuses increased by 8.8%.
Inflation as measured by the CPI averaged 2.0% over the same period. After
The median is the adjusting for inflation, average pay excluding bonuses was 5.3% higher than
the previous year and average pay including bonuses was 6.6% higher.
point where half
earn more and half Average Earnings
earn less.
Real average weekly earnings Inflation and earnings (incl bonuses)
June 2021 prices, £ % change on previous year
575
including bonuses 10 average earnings
550 8
6
525 excluding bonuses 4
2 CPI
500
0
475 -2
2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
Trends by Sector
Annual % change in average earnings (incl bonuses) Average weekly total pay
Great Britain, employees only (including bonuses) rose by
Total Private Public 10.1% in the private sector and
2019 Jun 3.9 3.8 4.1 grew by 2.8% in the public
2020 Jun -1.3 -2.6 4.1
sector in the three months to
2021 Apr 5.8 5.9 5.0
2021 May 7.4 8.2 4.0
June 2021 compared with the
2021 Jun 8.8 10.1 2.8 year before.
Note: Annual % change in earnings to three month period ending
in given month; data are seasonally adjusted
Source: ONS, Average Weekly Earnings series
Subject specialist
Brigid Francis-Devine Hourly pay levels
Median hourly earnings (excluding overtime) were £15.07 for full-time
Updates Median hourly pay excluding overtime employees at April 2020: £15.53 for men
ONS, Labour Market April 2020 (£) working full-time and £14.37 for women.
Statistics, 14 Female full-time
September 2021 Median hourly earnings (excluding
Male full-time overtime) were £10.39 for part-time
ONS, Annual Survey of Female part-time employees; £10.16 for men and £10.46 for
Hours and Earnings, women. Women are more likely than
Male part-time
men to work part-time.
October 2021 0 10
21 Commons Library Economic Indicators, 31 August 2021Economic Indicators
C1: Employment
32.28 million people were in employment in April-June 2021. Employment was
up 95,000 from the previous quarter but down 329,000 from the year before.
Employment; UK Employment Rate; UK
Millions, age 16+, seasonally adjusted %, age 16-64, seasonally adjusted
35 85
Men
33 80
31 75
Women
29 70
27 65
2009 2011 2013 2015 2017 2019 2021 2016 2017 2018 2019 2020 2021
The employment rate (the proportion of the population aged 16-64 in work)
was 75.1%, down from 75.7% a year previously. The employment rate for
women was 72.0%, up from 71.9% a year previously; and for men was 78.2%,
down from 79.6% a year previously.
Annual change in employment levels
Annual change to April-June 2021, thousands
1,000 Part time
Full time
500
466
0 144
-354 -305
-472
-106
-500
-1,000
All people Employees Self-employed
24.46 million people were working full-time in April-June 2021 while 7.82
million were working part-time. 4.28 million were self-employed and 27.88
million people were working as employees.
UK Employment
Seasonally adjusted
Total Men Women Youth
000's % 000's % 000's % 000's %
Age: 16+ 16-64 16+ 16-64 16+ 16-64 16-24 16-24
Apr-Jun 2018 32,386 75.5 17,161 80.1 15,226 71.0 3,835 54.8
Apr-Jun 2019 32,811 76.1 17,263 80.1 15,548 72.1 3,810 55.1
Apr-Jun 2020 32,605 75.7 17,092 79.6 15,513 71.9 3,675 53.6
Jan-Mar 2021 32,181 74.7 16,772 77.8 15,409 71.6 3,424 50.3
Apr-Jun 2021 32,276 75.1 16,839 78.2 15,438 72.0 3,513 51.7
Subject specialist Change on qtr Level 95 0.3 66 0.4 29 0.3 89 1.4
Harriet Clark % 0.3% 0.4% 0.2% 2.6%
Change on yr Level -329 -0.7 -253 -1.4 -75 0.1 -162 -1.9
Updates % -1.0% -1.5% -0.5% -4.4%
ONS, Labour Market
Notes: The employment rate is a percentage of the population aged 16 to 64
Statistics,
14 September 2021 Source: ONS Labour Market Statistics, Tables A05 and A06
22 Commons Library Economic Indicators, 31 August 2021Economic Indicators
C2: Unemployment
There were 1.60 million unemployed people in the UK in April-June 2021, a fall
of 53,000 from the previous quarter but an increase of 193,000 from the year
before.
Unemployment; UK The unemployment rate was 4.7%, (the
Millions, age 16+, seasonally adjusted percentage of the economically active
2 population who are unemployed). This is
down from 4.9% from the previous
1
quarter but up from 4.1% from the
previous year. The rate reached a post-
recession high of 8.5% in late 2011.
0
2016 2017 2018 2019 2020 2021
The unemployment rate for men was
4.9% and the unemployment rate was
Unemployment Rate; UK
%, age 16+, seasonally adjusted 4.5% for women.
6
530,000 young people aged 16-24 were
5 Men
unemployed, down 13,000 from the
4 Women
previous quarter and down 27,000 from
the year before. The unemployment rate
3
for 16-24 year olds was 13.1%, down from
2016 2017 2018 2019 2020 2021
13.2% a year before.
Forecasts
In their March 2021 Economic and fiscal outlook, the Office for Budget
Responsibility’s (OBR) unemployment rate forecast was 6.5% in Q4 2021 and
5.6% in Q4 2022.
The Treasury’s August 2021 survey of independent forecasts showed an
Subject specialist average forecast of 5.4% for Q4 2021 and 4.8% for Q4 2022.
Harriet Clark
UK Unemployment
Seasonally adjusted
Updates Total Men Women Youth
ONS, Labour Market 000's % 000's % 000's % 000's %
Statistics, Age 16+ 16+ 16+ 16+ 16+ 16+ 16-24 16-24
14 September 2021 Apr-Jun 2018 1,362 4.0 723 4.0 639 4.0 490 11.3
Apr-Jun 2019 1,329 3.9 740 4.1 589 3.6 502 11.6
Apr-Jun 2020 1,407 4.1 764 4.3 643 4.0 556 13.2
HM Treasury, Jan-Mar 2021 1,653 4.9 903 5.1 750 4.6 542 13.7
Forecasts for the UK Apr-Jun 2021 1,600 4.7 868 4.9 732 4.5 530 13.1
economy, 15 Change on qtr Level -53 -0.2 -35 -0.2 -18 -0.1 -13 -0.6
September 2021 % -3.2% -3.9% -2.4% -2.3%
Change on yr Level 193 0.6 104 0.6 89 0.5 -27 0.0
% 13.7% 13.7% 13.8% -5%
OBR, Economic and
fiscal outlook, Notes: The unemployment rate is the percentage of the economically active population who are unemployed.
November 2021 Source: ONS, Labour Market Statistics, Tables A05 and A06
23 Commons Library Economic Indicators, 31 August 2021Economic Indicators
C3: Unemployment International
The OECD produces harmonised unemployment rates for OECD members
based on the ILO definition of unemployment.
Harmonised Unemployment Rate (%)
15 United Kingdom 15 France 15 Germany
10 10 10
5 5 5
0 0 0
16 17 18 19 20 21 16 17 18 19 20 21 16 17 18 19 20 21
15 United States 15 Eurozone 15 G7
10 10 10
5 5 5
0 0 0
16 17 18 19 20 21 16 17 18 19 20 21 16 17 18 19 20 21
The UK harmonised unemployment rate for Q1 2021 was 4.9%. This was above
Germany (3.9%) but below the US (6.2%) and France (8.0%).
The rate for the Eurozone fell from 8.2% to 7.9% in Q2 2021, while in the G7 it
fell from 5.7% to 5.6%. The UK figure for this quarter has not been published.
Unemployment rates rose in almost all the OECD countries following the
coronavirus outbreak, although the size of the increase varied widely from
country to country.
Costa Rica had the highest unemployment rate out of the OECD member
states in Q1 2021 (18.9%) followed by Greece at 16.6%. Japan had the lowest
at 2.8%.
Youth (aged 15-24) unemployment is a major issue in many developed
economies at present. In Q1 2021 the youth unemployment rate was 44.5% in
Costa Rica, 41.4% in Greece and 39.0% in Spain. It was 13.7% in the UK.
Unemployment
Unemployed as % of labour force
y (standardised);
y J p g seasonally adjusted
)
CAN FRA GER ITA JPN UK USA Eurozone G7 OECD
2019 5.7 8.4 3.2 10.0 2.4 3.8 3.7 7.6 4.3 5.4
Subject Specialist 2020 9.6 8.0 3.8 9.3 2.8 4.6 8.1 7.9 6.5 7.2
Andy Powell 2020 Q2 13.1 7.3 3.8 8.5 2.7 4.1 13.1 7.6 8.6 8.6
Q3 10.1 8.8 4.1 10.0 3.0 4.8 8.8 8.5 7.0 7.7
Q4 8.8 8.0 4.1 9.9 3.0 5.2 6.8 8.2 6.0 7.0
Next Update
2021 Q1 8.4 8.0 3.9 10.3 2.8 4.9 6.2 8.2 5.7 6.7
OECD, Harmonised Q2 8.0 7.5 3.7 10.1 2.9 .. 5.9 7.9 5.6 6.6
Unemployment Rates, Change on qtr -0.3 -0.5 -0.1 -0.2 0.1 … -0.2 -0.2 -0.2 -0.2
9 September 2021 Change on yr -5.1 0.2 -0.1 1.6 0.2 … -7.1 0.3 -3.0 -2.0
Source: OECD, Harmonised Unemployment Rates
24 Commons Library Economic Indicators, 31 August 2021Economic Indicators
D1: Interest Rates and Monetary Policy
Major central banks around the world cut interest rates and expanded
quantitative easing in response to the coronavirus pandemic.
UK (Bank of England)
On 5 August, the Bank of England’s
Monetary Policy Committee (MPC) UK official interest rate
announced it had left interest rates 6%
unchanged at 0.1% and kept the total 5%
size of its bond-buying programme 4%
(known as quantitative easing, QE) 3%
unchanged at £895bn (to be 2%
completed by the end of 2021).
1%
In March 2020 the Bank introduced 0%
measures in response to Covid-19. 2007 2010 2013 2016 2019
QE consists of Interest rates were cut in two stages to 0.1% - the lowest they have ever
central banks been. On 11 March they were cut from 0.75% to 0.25% and then again to 0.1%
on 19 March 2020, where they have since remained. The MPC has also
creating new money expanded its quantitative easing (QE) programme by £450bn since the
electronically and pandemic began, taking the total value of assets it can own to £895bn.
then using it to
The MPC has also introduced a number of other schemes during the
purchase financial
pandemic, including to support banks’ lending capacity. For more, see
assets, mostly section 4.2 of the Library briefing paper, Coronavirus: Economic impact.
government bonds.
United States (Federal Reserve)
Policy was left unchanged at the Fed policy meeting ending 28 July. Interest
rates are at a range of 0-0.25% and every month the Fed is buying $80bn of
government debt and $40bn of mortgage debt, as part of its QE programme.
Responding to the pandemic, the Fed had by 15 March 2020 cut interest rates
to its current range of close to 0% from 1.5%-1.75% prior to the pandemic. On
23 March 2020, the Fed announced a wide range of measures designed to
support the economy. This included buying debt from the government,
corporations and purchasing other securities (such as those backed by
mortgages and other assets).
Subject Specialist
Daniel Harari Eurozone (European Central Bank)
At its 22 July meeting, the ECB left its main policies unchanged, with its main
Updates – next interest rates at 0.0%, and −0.5% (for overnight deposits from banks). The
scheduled monetary ECB’s pandemic-relative quantitative easing programme of bond purchases is
policy meetings planned to total €1.85 trillion by March 2022 (plus €3.2 trillion to date in non-
UK (23 Sep) pandemic QE). The ECB launched its pandemic response on 12 March 2020
US (22 Sep) and expanded it significantly on 18 March and 4 June. The ECB has also made
ECB (9 Sep) cheap loans available to banks to encourage them to lend to businesses.
25 Commons Library Economic Indicators, 31 August 2021Economic Indicators
D2: Public finances
Government borrowed £78 billion
Government borrowing and debt
during April to July 2021 according
Net borrowing Net debt to the ONS’s provisional estimate.
£ bn % GDP £ bn % GDP This is £62 billion less than during
2011/12 122 7.3% 1,235 72.8% April to July 2020. While borrowing
2012/13 125 7.2% 1,341 76.2% is falling, it remains at relatively
2013/14 105 5.8% 1,441 78.0%
ONS figures for 2014/15 96 5.1% 1,526 80.2%
high levels. Borrowing in the
2021/22 and 2020/21 2015/16 81 4.2% 1,575 79.8% financial year so far is the second
2016/17 54 2.7% 1,692 82.5% highest since monthly records
are provisional 2017/18 54 2.6% 1,742 82.1% began in 1993. These provisional
2018/19 38 1.8% 1,765 80.4% figures contain some forecast data
2019/20 57 2.6% 1,798 84.4%
2020/21 298 14.2% 2,137 97.2%
and are likely to be revised in the
2021/22 234 10.3% 2,503 107.4%
coming months.
2022/23 107 4.5% 2,631 109.0%
Net borrowing – 2023/24 85 3.5% 2,747 109.7% At the end of July 2021, public
often described as 2024/25 74 2.9% 2,761 106.2% sector net debt was equivalent to
2025/26 74 2.8% 2,804 103.8% 98.8% of GDP. Prior to the
the deficit – is the pandemic, in February 2020, the
difference between debt-to-GDP ratio was 83.4%.
what the
government spends The Library briefing Coronavirus: Economic impact looks at the effect of
coronavirus on the public finances.
and what it receives
in taxes over a
Public sector net borrowing: rolling 12-month total, £ billion
period.
400
300
Net debt is the total 200
100
amount that the
0
public sector owes –
-100
it is largely the 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
stock of past
borrowing.
Public sector net debt, monthly, % of GDP
120%
Subject Specialist 100%
Public sector net debt
Matt Keep 80%
60%
Updates 40%
Public sector net debt
(excluding Bank of England)
OBR, Economic and 20%
fiscal outlook, 27 0%
October 2021 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
ONS, Public sector Sources: Office for Budget Responsibility (OBR). Public finances databank;
finances, 21 Office for National Statistics (ONS). Series, J5II, J5IJ, HF6W, HF6X, CPOA
September 2021
26 Commons Library Economic Indicators, 31 August 2021Economic Indicators
T
T
D3: Financial Indicators
FTSE 100 Index
FTSE-100 Index The FTSE-100 tracks the share-prices of
Daily closing price the 100 largest companies listed on the
8,000 London Stock Exchange. In 2020, the
7,000 index fell dramatically, as global share
6,000 prices fell amid fears of the impact of the
5,000 coronavirus, closing at 4,993.89 on 23
4,000
March, its lowest level since October 2011.
3,000
2007 2010 2013 2016 2019
More recently, the FTSE has generally
been on an upward trend, closing at
7,220.14 on 11 August, its highest level since February 2020.
Brent Crude Oil
The price of Brent crude oil reached an Brent Crude Oil ($/barrel)
all-time high above $145/barrel in July Daily closing price of Brent crude, near-
month futures contract
2008. The price fell dramatically in
200
2020, owing to a collapse in demand
150
due to the coronavirus pandemic,
100
falling to $19.31 in April 2020, its lowest
50
level since February 2002. The price
0
reached $76/barrel on 13 July 2021, its
2007 2010 2013 2016 2019
highest since April 2019.
Gold price
The nominal price of gold exceeded
Gold ($ per ounce)
Daily price $1,800/ounce for the first time in August
3,000 2011, but the metal's price moderated
considerably after that, falling to
2,000
$1,049/ounce in December 2015. Despite
1,000 some turbulence following the
coronavirus outbreak, the price rose
0
2007 2010 2013 2016 2019
steadily in 2020, closing at a record high
of $2,067/ounce on 7 August 2020.
Data from 26 August 2021
FTSE-100 Oil ($/bbl) Gold ($/oz)
Subject specialist 26 Aug 2021 7124.98 71.62 1788.70
Daniel Harari %change over:
1-month 1% -3% -1%
Updates 12-months 18% 56% -6%
Financial Times, Note: Oil is Brent near-month futures price
Weekly basis Source: Financial Times
27 Commons Library Economic Indicators, 31 August 2021Economic Indicators
E1: Trade
In 2020, the UK’s exports of goods and services totalled £574 billion and
imports totalled £586 billion. The EU accounted for 42% of UK exports of
goods and services and 50% of imports in 2020.
Balance of trade, goods & services The UK generally imports more than it
£ billion, monthly data exports meaning that it runs a trade
15 deficit. A deficit of £119 billion on trade in
10
Services goods was partially offset by a surplus of
5
0 £107 billion on trade in services in 2020.
-5 Trade balance The overall trade deficit was £12 billion in
-10 2020.
-15 Goods
-20
2016 2017 2018 2019 2020 2021 The UK had a trade deficit with the EU of
£51 billion in 2020 and a trade surplus of
£43 billion with non-EU countries.
The trade deficit with all countries increased to £4.4 billion in the three
months to June compared with a £1.8 billion deficit in the previous three
months. Exports increased by 6.5% in cash terms over this period and imports
increased by 8.4%.
Trade in Goods and Services and Current Account Balance
Seasonally adjusted
Goods and Services (£bn) Current Account balance
Exports Imports Balance £bn % GDP
2019 689.3 716.7 -27.5 -68.6 -3.1%
2020 573.5 585.5 -12.0 -73.9 -3.5%
2020 Q2 135.7 123.8 11.9 -14.3 -3.0%
Q3 137.1 142.2 -5.1 -14.3 -2.6%
Q4 145.3 160.2 -14.9 -26.3 -4.8%
2021 Q1 137.5 139.2 -1.8 -12.8 -2.4%
Q2 146.4 150.9 -4.4 .. ..
Source: ONS, series: IKBH, IKBI, IKBJ, HBOP, AA6H
Current Account Balance The current account, which includes
% of GDP investment income and transfers as
Subject Specialist 2016 2017 2018 2019 2020 2021 well as trade, saw a deficit of £74
Ilze Jozepa 2 billion in 2020, compared with £69
0 billion in 2019. The current account
Updates -2 deficit was 3.5% of GDP in 2020
ONS, UK Trade, -4
compared with 3.1% in 2019.
-6
10 September 2021
-8
The current account deficit was
ONS, UK Balance of £12.8 billion in Q1 2021 (2.4% of GDP), compared with a deficit of £26.3 billion
Payments, (4.8% of GDP) in Q4 2020.
30 September 2021
28 Commons Library Economic Indicators, 31 August 2021Economic Indicators
E2: Exchange rates
The Sterling Exchange Rate Index (SERI) measures sterling’s value against a
‘basket’ of currencies, ‘trade-weighted’ (based on currencies’ relative
importance in UK trade). The SERI fell by 0.2% between June and July,
following an increase of 0.1% between May and June. Compared with the
same period a year ago, it is 6.4% higher. It is 22.5% below its January 2007
peak level.
On average in July compared with June, the pound fell by 1.6% against the
dollar. After falling to a 31 year low of $1.14 in June 2017, the value of the
pound against the dollar reached $1.43 in April 2018, its highest level since the
EU referendum. The pound fell to $1.15 in March 2020, its lowest since June
2017, before reaching $1.42 in May 2021, its highest rate since April 2018.
Sterling rose by 0.3% against the Euro on average in July compared to June,
following a rise of 0.4% between May and June.
€ /£ Exchange Rate US$/£ Exchange Rate
€ per £ (monthly average) $ per £ (monthly average)
2.0
1.5
1.5
1.0 1.0
2007 2010 2013 2016 2019 2007 2010 2013 2016 2019
Subject specialist
Daniel Harari Sterling Exchange Rates
Updates average rates in period and % changes
Financial Times, US Dollar ($) Euro (€)
sterling exchange Rate % change on yr Rate % change on yr
rates (daily) 2020 1.28 0.6% 1.13 -1.4%
2021 May 1.41 14.6% 1.16 2.8%
Bank of England, SERI Jun 1.40 12.0% 1.16 4.6%
& monthly rates, 3 Jul 1.38 8.8% 1.17 5.6%
September 2021 Source: Bank of England, Bankstats database
29 Commons Library Economic Indicators, 31 August 2021Economic Indicators
F1: Business and Consumer Confidence
Confidence surveys, with information generally released ahead of official
statistical data, can indicate changes to the economic outlook as well as
turning points in the economic cycle.
Business confidence ONS Business Impacts of Coronavirus
% of respondents with confidence Survey
business will survive next 3 months
60% The ONS conducts a voluntary survey of
High businesses to look at the impact of the
50%
40% Covid-19 pandemic.
30% Moderate
20%
In the two weeks ending 22 August 2021,
10%
0%
Low or none 83.2% of respondents had high or
Nov '20 Feb '21 May '21 Aug '21 moderate confidence their business
would survive the next three months.
Future output expectations CBI Industrial Trends Survey
% balance expecting
improvement/deterioration The CBI carries out monthly and
60 quarterly Industrial Trends surveys.
40
20 In August 2021, more manufacturers
0
-20 thought that output would rise over the
-40 next three months than thought it would
-60
-80
fall. The difference was +26% of
2016 2017 2018 2019 2020 2021 manufacturers, falling back somewhat
from the record high +44% in July.
Consumer confidence index GfK Consumer Confidence Survey
GfK Overall Index Score
GfK’s Consumer Confidence Index
20
measures a range of consumer attitudes,
10
0
including forward expectations of the
Subject Specialist -10
general economic situation and
Daniel Harari -20 households’ financial positions, and
-30 views on making major household
Update -40 purchases.
ONS, Business 2016 2017 2018 2019 2020 2021
The index was -8 in August 2021, down
insights and impact
from -7 in July to just below its pre-
on the UK economy, 9
pandemic level.
September 2021
CBI, Industrial Trends,
Mid-September 2021
GfK, Consumer
Confidence, 24
September 2021
30 Commons Library Economic Indicators, 31 August 2021Economic Indicators
F2: Retail sales
In July 2021, retail sales in Great Britain totalled £8.1 billion per week, down
by £0.1 billion from June. This figure includes money spent in shops,
supermarkets, in petrol stations and online.
Between June and July 2021, the total quantity of retail sales decreased by
2.5%, compared to an increase of 0.2% between May and June.
In the three months to July 2021, the volume of retail sales was 11.1% above
the same period last year (which included part of the first lockdown in 2020).
The volume of sales was 5.1% higher in July 2021 than pre-pandemic levels
(Feb 2020).
All figures are Volume of retail sales (incl. vehicle fuel) Volume of retail sales
seasonally 3 mth % change on yr, seasonally adjusted
Index 2018=100, seasonally adjusted
adjusted. 25
Non-
20
Food food Total
15
10 2019 Jul 101.7 102.1 104.7
5 2020 Jul 105.0 95.5 106.1
This means 0 2021 May 103.7 108.0 111.2
calendar effects -5
Jun 107.8 105.9 111.4
-10
(e.g. Easter moving -15
Jul 106.2 101.2 108.6
between March and -20 3m % change on yr -0.7 33.8 11.1
2016 2017 2018 2019 2020 2021 % change on Feb 20 4.9 0.4 5.8
April) and seasonal
effects (e.g.
increased spending The decrease in sales in July 2021 came from both food stores (which fell by
in December for 1.5% compared with June, following the end of the Euro 2020 championship)
and non-food stores (which fell by 4.4% compared with June, across all sub-
Christmas) are sectors). Sales in food stores remained above pre-pandemic levels. In July
removed. 2021, sales in non-food stores were 0.4% above pre-pandemic levels (Feb
2020).
The average weekly value of internet
Value of internet retail sales
sales was £2.1 billion in July 2021 2016=100, seasonally adjusted
(excluding fuel). This was 26.4% of
all retail sales (including fuel), up 200
from 26.2% in June 2021 but still high
relative to pre-pandemic levels. 150
Subject specialist Internet sales as a proportion of all 100
Georgina Hutton retail sales have been rising steadily
since 2006, reaching around 20% of 50
Updates all sales in 2019. Internet sales rose 0
ONS, Retail Sales, significantly in April 2020 with the 2008 2010 2012 2014 2016 2018 2020
17 September 2021 onset of the coronavirus pandemic,
representing over 27% of all sales since.
31 Commons Library Economic Indicators, 31 August 2021Economic Indicators
F3: Housing Market
UK House Price Index House prices, as measured by the UK
% change, seasonally adjusted (SA) House Price Index, increased by 13.2%
2% between June 2020 and June 2021. On a
1% seasonally adjusted basis, average
0% house prices increased by 4.2% between
-1%
May 2021 and June 2021.
-2%
-3%
2007 2010 2013 2016
House prices grew at different rates
2019
across the UK’s countries and regions
over the year to June 2021. House prices grew by 18.6% in the North West,
16.7% in Wales and 15.8% in Yorkshire & the Humber. Growth was slowest in
London at 6.3% and South East at 10.5%. House prices in Northern Ireland
grew by 9.0%, but Northern Ireland’s data is for growth in the year to Q2
2021.
Mortgage approvals for house Bank of England data on the number of
purchases; UK, Thousands, SA mortgages approved to finance house
150 purchases are a leading indicator of
house sales.
100
50 Mortgage approvals for house purchases
are significantly higher that the
0
2007 2010 2013 2016 2019
lockdown-related record low of May
2020. Mortgage approvals in May 2021
were 12% above February 2020, which was the last month to be largely
unaffected by the pandemic.
Mortgage approvals fell from 86,949 in May 2021 to 81,338 in June 2021.
House-building; England Thousands, SA Housing starts and completions fell
60 sharply in Q2 2020 reflecting the
50 coronavirus lockdown. They have risen
40 Completions since.
Subject Specialist 30
Matt Keep 20
Starts There were 46,010 house building starts
10
(seasonally adjusted) in England in Q1
0
Updates 2007 2010 2013 2016 2019
2021, a 7% increase compared with the
HM Land Registry, UK previous quarter, and a 36% increase
house price index, 15 compared with the same quarter of 2020.
September 2021
There were 49,470 house building completions (seasonally adjusted) in
England in Q1 2021, a 4% increase compared with the previous quarter, and a
Bank of England,
21% increase compared with the same quarter of 2020.
Money and credit, 31
August 2021
DCLG, House-
building, September
2021
32 Commons Library Economic Indicators, 31 August 2021Economic Indicators
F4: Household debt
Household debt as a % of disposable income
Household debt: % of disposable Household debt peaked in Q2 2008 at
income 150.1% of household disposable income.
150 It then declined to 126.5% by late 2015.
140
130 Growth in household debt levels
120
accelerated from early 2016, so that the
110
100 debt-to-income ratio rose again to
⚡
90 131.5% by mid-2017. In Q1 2021 it was
2007 2010 2013 2016 2019 130.2%.
Current average mortgage interest rates
Current average mortgage The average Standard Variable Rate
interest rates (SVR) was 3.61% in July 2021, down
6% 0.05% points on a year ago.
Average SVR
4%
The average 2-year fixed mortgage rate
2%
2-yr fixed (75% LTV) was 1.30% in July 2021, down 0.15% on
a year ago.
0%
2017 2018 2019 2020 2021
Individual insolvencies
Individual insolvencies There were 27,662 individual insolvencies
England and Wales, Thousands in England and Wales in Q2 2021, 1,233
40
fewer than in the previous quarter. The
largest increase since the current series
20 began in 2010 was seen between Q3 2020
and Q4 2020.
0
Subject specialist 2017 2018 2019 2020 2021 The Q2 2021 level is 13.9% lower than the
Brigid Francis-Devine level in Q2 2020.
Updates
In Scotland, there were 1,884 individual insolvencies in Q2 2021, 10% lower
Bank of England,
than a year before.
Statistical database,
7 September 2021 In Northern Ireland, there were 583 individual insolvencies in Q2 2021, up 63%
on the year.
Insolvency Service,
Insolvency Statistics,
31 August 2021
ONS, UK Economic
Accounts, 30
September 2021
33 Commons Library Economic Indicators, 31 August 2021Economic Indicators
4 Glossary
Definitions 1
Balance of payments: A country’s financial position, with other countries of
the world, comprising two parts:
Current account: the balance of imports and exports of goods and services,
income and transfers combined; Capital account: the difference between a
country’s capital invested in other countries, and the capital invested by other
countries in it. Technically, the two parts always balance. A balance of
payments deficit normally refers to a current account deficit.
Balance of trade: The difference between a country’s exports and imports of
either goods only or goods and services combined. Trade in financial services
account for around a third of UK exports, and thus partially offsets trade in
goods deficits.
Basic prices: Prices excluding taxes and subsidies on products.
Claimant count: The number of people aged 18 and over claiming
Jobseeker’s Allowance (JSA) benefits. This includes out-of-work Universal
Credit claimants.
Consumer Prices Index (CPI): This is the headline UK domestic measure of
inflation. It measures the average change from month to month in the prices
of consumer goods and services purchased in the UK.
Current account balance: The difference between receipts/payments due to
transactions in goods, services, income and transfers between the UK and all
other countries. A current account deficit means that total payments exceed
total receipts; in the reverse case, the current account is in surplus.
Current budget: Measures the balance of public sector current account
revenue over public sector current expenditure.
Current/constant prices: Current prices are the actual or estimated
recorded monetary value over a defined period for a group of industries or
products. They show the value for each item expressed in terms of the prices
of that period.
Constant prices refer to volume measures whose values are derived by
applying to current quantities, prices for a specific base period. They allow
figures to be represented so that the effects of inflation are removed. The
values for each time period are expressed in terms of the prices in a particular
base period.
Economically active: Those aged 16 and over who are either in employment
or unemployed.
1
Sources: ONS, HM Treasury, HM Revenue and Customs, Finance-Glossary.com.
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