Balance of Payments

Summarizes the flow of all goods, services, income, and transfer payments to and from the UK .  The report acts as a gauge for how the UK economy interacts with the rest of the world. CA tracks the trade balance (exports and imports for goods and services), income payments (such as interest, dividends and salaries) and unilateral transfers (aid, taxes, and one-way gifts). Current account is one of the three components (Financial Account, Capital Account and Current Account) that make up a country's Balance of Payments, the detailed accounting of all international interactions. Where the other side of the Balance of Payments, Capital and Financial Accounts deal mainly with financial assets and investments, the Current Account gives a detailed breakdown of how the country intermingles with rest of the global economy on a routine, non-investment basis.

A positive value (current account surplus) records that the flow of capital from these sources into the UK exceeds capital from these sources coming to the country.  A negative value (current account deficit) means that there is a net capital outflow from these sources. Persistent Current Account deficits may lead to a natural depreciation of a currency, as trade, income and transfer payments usually reflect Pound Sterling leaving the country to make payments in a foreign currency (just as underlying surpluses act as an appreciating weight).

There are a number of factors that often work to diminish the impact of the Current Account release on the market. The report is not very timely, released quarterly several weeks after the reporting period. Many of the components that lead to the final Current Account such as production and trade figures are known well in advance. Lastly, since the report reflect data for a specific reporting quarter, any significant developments in the Current Account should plausibly have been felt during that quarter and not during the release of data.

But just like GDP and Trade Balance, Current Account is central to forecasting long term developments in foreign exchange rates. It gives a detailed picture of how the British economy interacts internationally, breaking down these exchanges into separate components that can be tracked and often anticipated. Thus the weight of CA's importance has lead it historically to be one of the more important reports out of the United Kingdom .

The headline number is the Current Account balance and the percentage change in the Current Account from the previous quarter, and the value of the CA in Pounds.

Relevance: Tends to move markets on release
Release schedule : 8:30 (GMT); quarterly, in the end of the final month following the reference quarter
Revisions schedule : frequent revisions reflecting changes to merchandise trade and other transactions
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/STATBASE/Product.asp?vlnk=1118

The difference between exports and imports of British goods and services. The Trade Balance is one of the biggest components of the United Kingdom 's Balance of Payment, thus giving valuable insight into pressures on the value of the Pound.

A positive Balance of Trade figure (surplus) indicates that exports are greater than imports. When imports exceed exports, the UK experiences a trade deficit. Because foreign goods must be purchased using foreign currency, trade deficits fundamentally reflects that the Sterling is leaking out of the country. Such currency outflows may lead to a natural depreciation of a Pound, unless countered by similar capital inflows. At a bare minimum, deficits will weigh down the value of the currency.

There are a number of factors that work to diminish the market impact of UK Trade Balance. First, the report is not very timely, released within forty days after the reporting period. In addition, developments in many of the Trade Balance's components are typically well anticipated. Lastly, since the report reflects data for a specific reporting month, any significant changes in the Trade Balance should plausibly have been already felt during that month and not during the release of data. However, because of the overall significance of Trade Balance data, the release has historically remains one of the more important reports out of Britain .

The headline figure for trade balance is typically expressed in billions of Pounds and usually accompanied by a year-on-year percentage change figure.

Relevance: Tends to move markets on release
Release schedule : 8:30 (GMT); monthly, within 40 days following the report month
Revisions schedule : There can sometimes be large revisions due to adjustments for fraud and customs reporting processes
Source of report : Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/cci/nscl.asp?id=5821
AKA : Balance of Trade, International Trade in Goods and Services, Balance on Goods and Services

A gauge of Britain's trade with countries outside of Europe. The headline figure, expressed in billions of Pounds, is the value of exports to Non European Union countries minus the value of imports from those countries. A positive value represents a trade surplus while a negative value amounts to a trade deficit. The value of Great Britain's non-EU trade is about 30% less than that of its intra-EU trade, and the distinction between EU and non-EU figures can help investors anticipate which currency pairs will be most affected by changes in the UK trade balance.

Relevance : Tends to move the market.
Release schedule : 8:30 (GMT); monthly, within 40 days following the reporting month
Source of report : Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/default.asp
Select 'Economy' in the Browse by Theme dropdown menu
Refer > Balance of Payments > Balance of Trade > Overseas Trade > Extra Trade
AKA : Non EU Trade Balance on Goods and Services

The difference between imports and exports of goods. Visible Trade differentiates itself from Trade Balance because it does not record intangibles like services, only reporting on physical goods. Because Britain's economy is highly trade driven, Visible Trade data can give critical insight into developments in the economy and into foreign exchange rates.

Negative Visible Trade (deficit) indicates that imports of goods are greater than exports. When exports are greater than imports, the UK experiences a trade surplus. Trade surpluses indicate that funds are coming into the UK in exchange for exported goods. Because such exported goods are usually purchased with Pounds, trade surpluses usually reflect currency flowing into Britain, such currency inflows may lead to a natural appreciation of Pound Sterling, unless countered by similar capital outflows. At a bare minimum, surpluses will buoy the value of the currency.

There are a number of factors that work to diminish the market impact of UK Visible Trade on markets. The report is not very timely, released monthly about forty days after the reporting period. Developments in many of the components that comprise the figure are also usually well anticipated. Lastly, since the report reflect data for a specific reporting month, any significant changes in Visible Trade should plausibly have been already felt during that quarter and not during the release of data. But because of the overall significance of Trade on Foreign Exchange Rates, the figure has a history of being one of the more important reports out of the UK.

The headline figure is expressed as the value of the merchandise trade surplus or deficit in billions of Pounds.

Relevance: Tends to move markets on release
Release schedule : 8:30 (GMT); monthly, within 40 days following the reporting month
Revisions schedule : Revisions can be large
Source of report : Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/default.asp
Select 'Economy' in Browse by Theme drop down
Refer > Balance of Payments > Balance of Trade > Balance in Trade of Goods
AKA : Trade Balance on Goods, Merchandise Trade Balance

GDP and Output Report

An indicator for broad overall growth in the United Kingdom. Robust UK GDP growth signals a heightened level of economic activity, and therefore a high demand for currency. Economic expansion also raises concerns about inflationary pressure, which generally prompts monetary authorities to increase interest rates. This means that positive GDP readings are generally bullish for a given currency, while negative readings are bearish.

Due to the untimeliness of this report and because data on GDP components are available beforehand, the actual GDP figure is usually well anticipated. But given its overall significance GDP has the tendency to move the market upon release, acting to confirm or upset economic expectations. Robust GDP growth signals a heightened level of activity that is generally associated with a healthy economy. However economic expansion also raises concerns about inflationary pressures which may lead to monetary policy tightening.

The headline figure for UK GDP is an annualized percentage growth rate.

Technically, Gross Domestic Product is calculated in the following way:

GDP = C + I + G + (EX - IM)
where
C = private consumption
I = private investment
G = government expenditure
EX = exports of goods and services
IM = imports of goods and services

Technical note : GDP is the total market value of goods and services produced in the U.K. within a given period after deducting the cost of goods and services used up in the process of production. Therefore, GDP excludes intermediate goods and services and considers final aggregates only.

Relevance: Tends to move markets on release
Release schedule : 8:30 (GMT); quarterly, released approximately 3.5 weeks after end of quarter
Source of report : U.K. Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp

An unofficial estimate of UK GDP that comes out one month before the official release. Calculated using statistical projection techniques, the NIESR estimates are highly respected and can influence monetary policy.

The meaning and consequences of the report are very close to those for official GDP numbers. A high rate of growth signals a heightened level of economic activity. Such expansion also raises concerns about inflationary pressure, which may prompt monetary authorities to increase interest rates. Accordingly, high NIESR GDP Estimates are generally bullish for the Pound, while negative readings are bearish.

Relevance: Tends to move markets on release
Release schedule : 23:01 (GMT); monthly, within 2 weeks of reporting month's end
Source of report : National Institute of Economic and Social Research
Web Address : http://www.niesr.ac.uk
Address of release : http://www.niesr.ac.uk/gdp/gdpestimates.php

A measure of the manufacturing output of the energy sector, factories, and mines. Industrial production is significant as a short term indicator of the strength of UK industrial activity. Industry accounts for about a quarter of overall GDP. Because industrial production accounts for most of the volatility in GDP, foreknowledge of trends in manufacturing go a long way in forecasting UK output. High or rising Industrial Production figures suggest increased production and economic expansion, healthy for the Pound. However, uncontrolled levels of production and consumption can spark inflation. In times of inflation the Bank of England may raise interest rates to control growth.

Relevance: Rarely affects markets
Release Schedule: 8:30 (GMT); monthly, usually 26 working days following the reporting month's end
Revisions Schedule: Monthly revisions made to adjust for incomplete data.
Source of Report: Office for National Statistics (UK)
Web Address: http://www.statistics.gov.uk/default.asp
Address of release: http://www.statistics.gov.uk/statbase/Product.asp?vlnk=6230&More=N
AKA: Index of Production, IoP

A survey of senior manufacturing executives on trends in output, prices, exports, and costs. The CBI Industrial Trends Survey collects data on topics like current business confidence, capacity utilization, and investment intentions. The survey differs from most other economic surveys in that it focuses on the opinions of executives rather than quantitative data.

The report is released as an index with the zero boom/bust centerline.

Relevance: Rarely affects markets
Release schedule : Quarterly
Revision schedule: Never revised
Source of report : CBI
Web Address : http://www.cbi.org.uk/
Address of release : Requires Subscription

A monthly guage of manufacturing activity and future outlook. The CIPS PMI is comparable to the US ISM survey, similarly based on the opinions of executives in manufacturing companies. Purchasing managers are tasked with gauging future demand, and adjusting orders for materials accordingly. The PMI summarizes the opinions of these executives to give a picture of the future of the manufacturing sector. A higher PMI indicates that materials purchases are increasing and that the economic outlook is positive. Alternately, a lower PMI means orders for materials are down and the future outlook is less favorable. By nature, the figure is very sensitive to the business cycle and tends to match growth or decline in the economy as a whole.

The PMI is presented as an index with a value between 1-100.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); monthly, on the first working day after the reporting month.
Revisions schedule : Minor revisions are made monthly, going back 2 or 3 months.
Source of report : Chartered Institute of Purchasing and Supply and NTC Research
Web Address : http://www.cips.org
Address of release : http://www.cips.org/Page.asp?PageID=177&CatID=42
(Requires Subscription)
AKA: CIPS Purchasing Manager's Index: Manufacturing

A Pre-Budget Report (PBR) is delivered by the Chancellor to the House of Commons each fall. It provides a year to date progress report on what has been achieved so far, gives an update of the state of the economy and public finances, and sets out the direction of Government policy in the run up to the spring Budget.

Relevance : Rarely affects markets
Release schedule : Annually
Source of report : HM Treasury
Web Address : www.hm-treasury.gov.uk
Address of release : http://www.hm-treasury.gov.uk/pre_budget_report/prebud_index.cfm

The amount of money financed to the UK government. A higher value indicates a worsening fiscal condition for the British Government as the public sector is unable to maintain its spending patterns without further financing. As with any economy, budget deficits are unfavorable and viewed as bearish for the Pound.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); monthly
Revisions schedule : Revisions can be substantial as total public sector income and expenditure are released.
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/default.asp
AKA: Public Sector Net Cash Requirement (PSNCR), Public Sector Accounts

The amount of new debt held by the UK governments. In the long run, the public sector account must be in balance in order for the economy to be sustainable. If the UK spends more than what it earns, it must finance this budget deficit with an increase in Net Borrowing. Because budget deficits are generally unfavorable for the economy, growth in Net Borrowing is considered bearish for the Pound. Likewise, if Net Borrowing is negative, it means the UK is running a budget surplus and, rather than borrowing money, is a net lender. The headline number is the net borrowing for the previous month in billions of Pounds.

Relevance: Rarely affects markets
Release schedule: Monthly > 14 days after report period
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=805
AKA : Net lending

Confidence and Sentiment Reports

Survey that queries economic participants on their current and future expectations for the UK economy. Rising consumer confidence generally precedes increased consumer spending, which drives both economic growth and inflation. The figure is released at the start of each month, making Nationwide Consumer Confidence a timely measure of consumer sentiment now and in the immediate future.

The headline figure is the index value for the Nationwide Consumer Confidence Index, where the May 2004 figure is 100.

Relevance: Moderate market impact
Release schedule : 23:01 (GMT); monthly, on the Wednesday before the Monetary Policy Committee announces its Base Rate decision
Source of report : Nationwide
Web Address : http://nationwide.co.uk/default.htm
Address of release : http://www.nationwide.co.uk/consumer_confidence/default.htm
AKA: Nationwide Consumer Confidence Index

The change in capital expenditures made by private firms. Businesses only invest when they are optimistic about future economic growth and expect a profitable return on their investments. Because of this, increased capital expenditures usually reflect a higher level of consumer demand that induces companies to expand their productive capacity. Current Business Investment usually allow for higher GDP in the future. For these reasons Business Investment may lead economic growth.

The headline number is the percentage change in investment from the previous quarter.

Relevance: Rarely affects markets
Release schedule : Updated quarterly in the Economic Trends report (Economic Trends is a monthly report, but the Business Investment data is updated quarterly)
Revision schedule: Quarterly
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/
AKA: Business Demand

A survey of senior manufacturing executives on trends in output, prices, exports, and costs. The CBI Industrial Trends Survey collects data on topics like current business confidence, capacity utilization, and investment intentions. The survey differs from most other economic surveys in that it focuses on the opinions of executives rather than quantitative data.

The report is released as an index with the zero boom/bust centerline.

Relevance: Rarely affects markets
Release schedule : Quarterly
Revision schedule: Never revised
Source of report : CBI
Web Address : http://www.cbi.org.uk/
Address of release : Requires Subscription

A monthly guage of manufacturing activity and future outlook. The CIPS PMI is comparable to the US ISM survey, similarly based on the opinions of executives in manufacturing companies. Purchasing managers are tasked with gauging future demand, and adjusting orders for materials accordingly. The PMI summarizes the opinions of these executives to give a picture of the future of the manufacturing sector. A higher PMI indicates that materials purchases are increasing and that the economic outlook is positive. Alternately, a lower PMI means orders for materials are down and the future outlook is less favorable. By nature, the figure is very sensitive to the business cycle and tends to match growth or decline in the economy as a whole.

The PMI is presented as an index with a value between 1-100.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); monthly, on the first working day after the reporting month.
Revisions schedule : Minor revisions are made monthly, going back 2 or 3 months.
Source of report : Chartered Institute of Purchasing and Supply and NTC Research
Web Address : http://www.cips.org
Address of release : http://www.cips.org/Page.asp?PageID=177&CatID=42
(Requires Subscription)
AKA: CIPS Purchasing Manager's Index: Manufacturing

A monthly guage of the UK service sector that takes into account business outlook. The survey queries executives in transport and communications, financial intermediation, business services, personal services, computing and IT, hotels and restaurants.

Purchasing managers are tasked with gauging future demand, and adjusting orders for materials accordingly. The PMI summarizes the opinions of these executives to give a picture of the future of the service sector. A higher PMI indicates that materials purchases are increasing and that the economic outlook is positive. Alternately, a lower PMI means orders for materials are down and the future outlook is less favorable. By nature, the figure is very sensitive to the business cycle and tends to match growth or decline in the economy as a whole.
Because the contribution Services makes to the economy tends to be very consistent and predictable, Services PMI figures typically do not move markets

The PMI is presented as an index with a value between 1-100.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); monthly, on the first working day after the reporting month.
Revisions schedule : Minor revisions are made monthly, going back 2 or 3 months.
Source of report : Chartered Institute of Purchasing and Supply and NTC Research
Web Address : http://www.cips.org
Address of release : http://www.cips.org
AKA: CIPS Purchasing Manager's Index: Services

A monthly gauge of construction sector activity. The CIPS PMI asks executives in the construction sector about the state of business and the current level of purchasing. These managers are tasked with gauging future construction demand, and adjusting orders for materials accordingly. The PMI summarizes the opinions of these executives to give a picture of the future of the construction sector. A higher PMI indicates that materials purchases are increasing and that the economic outlook is positive. Alternately, a lower PMI means orders for materials are down and the future outlook is less favorable. By nature, the figure is very sensitive to the business cycle and tends to match growth or decline in the economy as a whole.

The PMI is presented as an index with a value between 1-100.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); monthly, on the first working day after the reporting month.
Revisions schedule : Minor revisions are made monthly, going back 2 or 3 months.
Source of report : Chartered Institute of Purchasing and Supply and NTC Research
Web Address : http://www.cips.org
Address of release : http://www.cips.org
AKA: CIPS Purchasing Manager's Index: Construction

Prices, Wages and Sales Figures

A monthly survey that measures the price changes of goods produced by UK manufacturers. The figure is also known as "Factory Gate Price" because it usually matches the price of goods when they first leave the factory. Increased prices in manufacturing typically lead to higher retail prices for consumers. However, it is also likely that higher output prices are caused by manufacturers charging a higher premium due to higher demand for their goods. Consequently, market trends in consumption should be considered with Output PPI to avoid data misinterpretation.

There is also a Core Output PPI, which excludes volatile items such as food and energy. The Core PPI is generally a better measure of inflation because it excludes those items whose short-term price fluctuations can distort inflationary data.

The headline is the percentage change in the Producer Price Index (Output) from the previous quarter and previous year.

Relevance: Moderate market impact
Release schedule : 8:30 (GMT); quarterly
Source of report : U.K. Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp
AKA: Output PPI, Factory Gate Prices

A monthly survey that measures change in input prices as incurred by UK manufacturers. Input prices include the cost of materials used plus operation costs of running the business. The index can be used as a measure of inflation, given that higher input costs will likely be passed on from producers to consumers in the form of higher retail prices. Th e figure is also calculated as Core Input PPI, which excludes volatile inputs such as food and energy that may distort the data. As such, the core figure is a more appropriate measure of inflation.

The headline is the percentage change in the Producer Price Index (Input) from the previous quarter and previous year.

Relevance: Moderate market impact
Release schedule : 8:30 (GMT); quarterly
Source of report : U.K. Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp
AKA: Input PPI

Retail Price Index measures changes in the prices of goods and services bought for household consumption in the UK. The RPI takes a large sample of retail goods including food, tobacco, household goods and services, transport fares, motoring costs, clothing, and leisure goods and services. An increase in the index means that prices have increased on average (inflation) while a decrease means that prices on the whole have fallen (deflation).

Since early 1996 the UK has also tracked a similar CPI figure. Due to differences in how the figures are calculated, (RPI includes some housing and tax figures, excludes the top 4% of income earners, among other characteristics), PRI will tend to over state price changes compared to CPI. Generally though RPI and CPI give the same picture of inflation.

Since late 2003 the UK government has preferred to set inflation targets on CPI instead of the Retail Price Index, decreasing RPI's impact on the market.

The headline figure is the percentage change in the index from the previous quarter and previous year. RPI data is also used for indexation of state benefits and pensions.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); monthly, typically mid month after the reporting month's end
Revisions schedule : Not revised
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp

A monthly indicator of price changes at the most popular retail outlets in the United Kingdom. The index takes into account five hundred of the most commonly purchased goods and gives insight into consumer-price inflation. Shop Prices differentiate themselves from British CPI by coming out days before the headline inflation figure. Increases in the BRC Shop Price Index are bullish for the Pound, given that the Bank of England usually raises interest rates to control inflation reflected in the BRC. Conversely, a falling BRC Shop Price Index suggests falling price pressures.

BRC appear in the headlines as the monthly percentage change for the BRC Shop Price Index.

Relevance: Rarely affects markets
Release schedule : 9:30 (GMT); monthly, the first week after the reporting period
Source of report : British Retail Consortium
Web Address : http://www.brc.org.uk/
Address of release : http://www.brc.org.uk/
Refer > Current Affairs > Shop Price Index > United Kingdom

The labor cost of consistent unit of production. A good way to think about this figure is how much do employer's end up paying in wages per product made. Unit wage costs give an idea of the level of worker productivity and prevailing labor costs for UK corporations. Unit wage costs are inversely related to productivity because when workers become more productive the cost of each unit produced by that worker drops. Higher productivity helps to ease inflationary pressures.

The headline value is the annualized percentage change in unit wage costs from the previous year's quarter.

Relevance: Rarely affects markets
Release schedule : Quarterly with the Productivity reports
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp
(released with Productivity reports)

An indicator for earnings growth. The data excludes bonuses, which might distort overall earnings growth. A strong Average Earnings Increase figure suggests a wealthier consumer population, which leads to increased demand and consumption. Because economic growth is partly fueled by consumer spending, a high Average Earnings Increase may also raise concerns about inflation. The headline figure is the annualized percent change in earnings for the reporting quarter.

The report tends to be insignificant, compared to boarder employment figures released at the same time. But sharp deviations from expected figures have been known affect the market.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); Quarterly
Source of report : U.K. Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp
Refer > Labour Market

Measures the outstanding debt held by consumers. Consumer Credit levels coincide with the economy, rising during economic expansion and dropping during a recession. Growth in Consumer Credit means that consumers have higher spending ability, which can fuel economic growth. However, too much Consumer Debt can result in an economic slowdown in the long term if consumers become overburdened with debt, then either reducing consumption or passing debt on to the financers after bankruptcy. The headline value is the outstanding debt held by consumers.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); quarterly
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/STATBASE/Product.asp?vlnk=308 Refer > Economic Trends
AKA: Consumer Debt

Measures the change in the volume of sales by retailers in the United Kingdom . The data is gathered by a monthly survey of large retailers and a representative sample of smaller retail businesses. Higher retail sales volume shows stronger consumer demand, higher retail output, and economic growth. The headline is the seasonally adjusted percentage change in Retail Sales volume from the previous quarter and previous year.

Relevance: Tends to move markets on release
Release schedule : Quarterly
Revision schedule : Quarterly
Source of report : U.K. Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp
AKA: Retail Sales Index

John Lewis is the largest department store group network in the U.K. It also owns Waitrose, a major supermarket chain, making John Lewis Partnership one of the biggest retailers in the U.K. Because of its size and market share, changes in John Lewis sales are a good indicator for the health of the U.K. retail sector. While most stores report sales on a monthly and quarterly basis, John Lewis reports weekly, making their reports a useful gradual indicator of the retail sector. The headline is the percentage change in department sales from the same week a year ago.

Relevance: Rarely affects markets
Release schedule : Weekly
Source of report : John Lewis Partnership
Web Address : http://www.johnlewispartnership.co.uk/
Address of release : http://www.johnlewispartnership.co.uk/
Refer > Financial
AKA: John Lewis Partnership Weekly Sales

Monetary Policy - Money and Interest Rates

The announcement of whether the Bank of England has increased, decreased or maintained the key interest rate. The BoE meets monthly to decide on monetary policy. After each meeting policy decisions are announced. The main task of the Bank of England's Monetary Policy Committee is to set the monetary stance by fixing the overnight borrowing rate, which is incremental in determining the short-term rates. Through this mechanism, the BoE attempts to affect price levels in order to keep inflation within the target range while maintaining stable economic growth and employment.

The BOE Rate decision has great influence on financial markets. Changes in rates affect interest rates for consumer loans, mortgages, bond, and the exchange rate of the Pound. Increases in rates or even expectations of increases tend to cause the Pound to appreciate, while rate decreases cause the currency to depreciate.

The Bank of England Monetary Policy Committee issues a statement with every rate announcement. Because the decision itself is usually highly anticipated, the wording of the BOE statement is usually as important if not even more important than the actual interest rate move made by the central bank. The statement contains the BOE's collective outlook on the economy as well as hints about future monetary policy while the change to interest rates is nothing more than a number. The statement provides clues on plans for the future. When it comes to interest rates, the future direction of rates is usually far more important than its current rate

Relevance: Tends to move markets on release
Release schedule : 11:00 AM GMT (about 7:00 AM EST); Monthly in the first or second week.
Source of report : Bank of England Monetary Policy Committee
Web Address : http://www.bankofengland.co.uk
Address of release : http://www.bankofengland.co.uk/monetarypolicy/decisions.htm
Refer to current year >> Most recent release.

The Bank of England Monetary Policy Committee keeps notes from its rate decision meetings. The detailed minutes from these meetings give some of the best insight into the monetary policy decision making process and what the BOE thinks about economic developments inside and outside of the UK.

Markets tend to focus most of their attention on the key points discussed during the meeting that suggest future interest rate changes. For example if the minutes state that high consumer spending and a rapidly expanding housing market are fueling inflation, then markets participants will tend to monitor these key sectors closely in order to gauge the likelihood of a rate increases in the future.

Because minutes come out two weeks after the BOE meets, markets will discount some information in the report. Market participants tend to read into the overall mood the Bank of England gives during the meeting. If the BOE is cautious about the inflationary outlook for the economy (characterized as "Hawkish"), then the market has a higher likelihood of future rate increases. If the Bank is optimistic ("Dovish") it suggests to markets that inflation is in check and that future rate increases are less likely.

Relevance: Tends to move markets on release
Release Schedule : Two weeks after the date of the policy decision
Source of Report : Bank of England Monetary Policy Committee
Web Address : http://www.bankofengland.co.uk
Address of Release : http://www.bankofengland.co.uk/publications/minutes/index.htm Refer to the most recent Monetary Policy Committee Minutes.

Measures the outstanding debt held by consumers. Consumer Credit levels coincide with the economy, rising during economic expansion and dropping during a recession. Growth in Consumer Credit means that consumers have higher spending ability, which can fuel economic growth. However, too much Consumer Debt can result in an economic slowdown in the long term if consumers become overburdened with debt, then either reducing consumption or passing debt on to the financers after bankruptcy. The headline value is the outstanding debt held by consumers.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); quarterly
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/STATBASE/Product.asp?vlnk=308 Refer > Economic Trends
AKA: Consumer Debt

Employment

The Claimant Count is the UK's most timely measure of unemployment. The report measures the number of people who claim unemployment benefits, but actively seeking work. The Claimant Count serves as a barometer for the health of the UK labor market. Higher job growth accompanies economic expansion and could spark inflationary pressures.

The headline number is a percentage change in the figure.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); monthly, usually in the middle of the month.
Revisions schedule : None. (Sample error is rare)
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp
Refer > Labour Market > Claimant count (Jobseeker's Allowance)

An indicator for earnings growth. The data excludes bonuses, which might distort overall earnings growth. A strong Average Earnings Increase figure suggests a wealthier consumer population, which leads to increased demand and consumption. Because economic growth is partly fueled by consumer spending, a high Average Earnings Increase may also raise concerns about inflation. The headline figure is the annualized percent change in earnings for the reporting quarter.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); Quarterly
Source of report : U.K. Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp
Refer > Labour Market

Housing

Gauge for costs of homes in the United Kingdom. The figure is based on surveyors' opinions on the state of the market, calculated as is the percent of surveyors reporting a rise in prices minus those reporting a fall. A rise in house prices indicates a strong housing market, which generally reflects a strong overall economy.

Relevance: Moderate market impact
Release schedule : 23:30 (GMT); Monthly, in the middle of the following month.
Revision schedule : Few or no revisions
Source of report : Royal Institution of Chartered Surveyors (RICS)
Web Address : http://www.rics.org/
Address of release: http://www.rics.org/
AKA: RICS Housing Market Survey

Gauge for costs of homes in the United Kingdom . Mortgage data is used to provide a timely measure of the level of prices. House prices give good information current conditions in the housing market. The Index can precurse broader inflationary pressures felt in later more market moving reports should housing price pressures feed into consumer prices.

Relevance: Rarely affects markets
Release schedule : 6:00 (GMT); Monthly, at the end of the reporting month.
Revision schedule : Monthly data is not usually revised
Source of report : Nationwide Building Society
Web Address : http://www.communities.gov.uk/
Address of release : http://www.nationwide.co.uk/hpi/review.htm
AKA: Nationwide House Price Index

Gauge for costs of homes in the United Kingdom. The FT House Price Index uses the National Land Registry's database of monthly property transactions and other house price indicators to create a picture of home prices. The activity of the housing market is significant, impacting the economy as a whole. Increases in house prices tend to make homeowners feel as though they are holding more wealth, buoying consumer sentiment and encouraging consumer spending. These prices may also lead to later inflationary pressures.

As the housing market usually leads the economy, rising home prices are indicative of the strength of the economy.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); Monthly, in the middle of the following month.
Revision schedule : Few or no revisions
Source of report : Financial Times
Web Address : http://www.ft.com/
Address of release :http://www.ft.com/cms/s/1d089640-fb60-11d8-8ad5-00000e2511c8.html
AKA: FT House Price Index

A monthly gauge of construction sector activity. The CIPS PMI asks executives in the construction sector about the state of business and the current level of purchasing. These managers are tasked with gauging future construction demand, and adjusting orders for materials accordingly. The PMI summarizes the opinions of these executives to give a picture of the future of the construction sector. A higher PMI indicates that materials purchases are increasing and that the economic outlook is positive. Alternately, a lower PMI means orders for materials are down and the future outlook is less favorable. By nature, the figure is very sensitive to the business cycle and tends to match growth or decline in the economy as a whole.

The PMI is presented as an index with a value between 1-100.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); monthly, on the first working day after the reporting month.
Revisions schedule : Minor revisions are made monthly, going back 2 or 3 months.
Source of report : Chartered Institute of Purchasing and Supply and NTC Research
Web Address : http://www.cips.org
Address of release : http://www.cips.org/
AKA: CIPS Purchasing Manager's Index: Construction

The percentage of persons willing to work and actively seeking employment but who are without jobs. A lower Unemployment Rate translates into more income-earning workers and greater consumption. Increased expenditure accelerates economic growth, but can also heighten inflationary pressures. On the other hand, a higher unemployment rate

Relevance: Moderate market impact
Release schedule : Quarterly
Source of report : U.K. Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp

Measures the number of people who claim unemployment benefits, but are actively seeking work. Released with the Claimant Count report, Jobless Claims Change serves as a barometer for the health of the UK labor market. It is similar to the Claimant Count except the headline figure is as an actual number, whereas the Claimant Count is a percentage. Higher job growth accompanies economic expansion and could spark inflationary pressures.

Relevance: Rarely affects markets
Release schedule : 8:30 (GMT); monthly, usually in the middle of the month.
Revisions schedule :
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp
Refer > Labour Market > Claimant count (Jobseeker's Allowance)

Measures the change in prices for retail goods and services, including food and gas. The CPI is the key measure of inflation for the UK and is used by the Bank of England in making interest rate decisions. The report tracks changes in the price of a basket of goods and services that a typical British household might purchase. An increase in the index indicates that it takes more Sterling to purchase this same set of basic consumer items.

Core CPI
A different form of the CPI is the Core CPI, which excludes prices for volatile items such as energy and food. The Core CPI is considered a better measure of inflation, as it excludes items that can distort the actual change in the cost of living.

In order to manage inflation the Bank of England may raise interest rates, which slows economic growth. Higher interest rates make holding the Pound more attractive to foreign investors, and the higher level of demand will place upward pressure on the value of the Pound.

CPI figures are reported as the annualized month-to-month and annual percentage change in the index.

Relevance: Tends to move markets on release
Release schedule : 8:30 (GMT); monthly, mid-month following the reporting month
Source of report : Office for National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp
Refer > Prices and Inflation
AKA : Core CPI