Business NewsUK Statistics

Economic review: January 2018

An analysis of prices statistics and the main economic stories from UK National Statistics produced over the latest quarter.

Download Economic Review as PDF 

Table of contents

  1. Authors
  2. Main points
  3. Introduction
  4. Import intensity
  5. CPIH-consistent inflation rates for UK household groups
  6. Economic Statistics Transformation Programme: a flow of funds approach to understanding quantitative easing
  7. Recent releases
  8. Appendix 1: CPIH import intensities
  9. References

Main points

Import intensity

It is possible to use data from supply and use input-output tables to generate estimates of import intensities for household consumption, capturing both goods imported directly for household consumption and the imported input content of goods produced domestically for household consumption.

However, a number of assumptions have to be made regarding, for example, the use of imports and the conversion from Classification of Products by Activity to Classification of Individual Consumption According to Purpose so these estimates should be treated with caution.

The resulting total import intensities of consumer goods correlate closely with their direct import intensities, other than goods with zero direct import intensity, such as services, which show a wide range of indirect import intensity.

The estimates generated as a result of these assumptions allow us to group consumption goods into buckets according to their degree of import intensity.

The highest import intensity bucket shows an inflation rate that tracks movements in the sterling exchange rate more closely than the lowest import intensity bucket; an intuitively appealing result.

Introduction

This edition of the Economic Review is the fourth following the introduction of Economic statistics theme days in January 2017.

Each Economic Review in this new format will have an overarching analytical theme and follow a quarterly publication timetable.

The theme of this edition is prices, with updated analysis of import intensity for household consumption and impact on the Consumer Prices Index including owner occupiers’ housing costs (CPIH) and inflation rates for different UK household groups.

Where possible, each Economic Review will also highlight progress being made to develop improved methods and statistics, which reflect the modern economy in line with the recommendations in the Independent review of UK economic statistics final report (Bean Review).

In this review we highlight flow of funds as an approach to understanding quantitative easing.

The next Economic Review is due for publication in April 2018 with a theme of regional economy analysis.

Download Economic Review as PDF 

Source: Office for National Statistics licensed under the Open Government Licence v.1.0.

 

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