Economic Trends IN THIS ISSUE New Director for CSO. United Kingdom National Accounts: third quarter 1991. International comparisons of taxes and social security contributions in 20 * OECD countries wa | - @ 1979-1989. sli - ‘ Effects of taxes and @ 4 benefits on a household income 1989. y NX - No. 459 January 1992 Articles published in Economic Trends United Kingdom National Accounts. An article containing quarterly figures is published every January, April, July and October United Kingdom balance of payments. An article showing quarterly figures is published every March, June, September and December Cyclical indicators for the United Kingdom economy. An article showing individual indicators is published every February, May, August and November Other Articles 1989 January International comparisons of taxes and social security contributions in 20 OECD countries 1976-1986. The effects of rebasing on the estimates of gross domestic product. February An investigation into balancing the UK national and financial accounts, 1985-87. The rebased index of production. March The Budget: 14 March 1989. The economy: recent developments and prospects to mid-1990. May Energy consumption in the United Kingdom. July Regional accounts 1987 Part 2: Houschold income by county. August A technical note on the treatment of the Community Charge and non-domestic rates in the National Accounts. Research and development in the United Kingdom in 1987. November Regional Accounts 1988. Part 1. December Employment in the public and private sectors. 1990 March The Budget: 20 March 1990. The economy: recent devclopments and prospects to mid-1991. April Regional Accounts 1988: Part 2. International comparisons of taxes and social contributions in 20 OECD countries 1977-1987. May The effects of taxes and benefits on houschold income 1987. June The Welsh index of production and construction. September Research and development in the United Kingdom in 1988. October Estimates of the distribution of wealth. November International comparisons of taxes and social security contributions in 20 OECD countries 1978-1988. Regional Accounts 1989. Part 1. December Employment in the public and private sectors. 1991 January The 1989 Share Register Survey. February Improving Economic Statistics- The Chancellor's Initiative. March The Budget: 19 March 1991. The economy: recent developments and prospects to mid-1992. The effects of taxes and benefits on houschold income 1988. April Regional Accounts 1989. Part 2. June Number of property transactions in England and Wales. July Number of property transactions in England and Wales (additions). August Research and development in the United Kingdom in 1989. October The 1991 Share Register Survey. National and Sector Balance Sheets. Assets on finance leases - a switch in recording. November Regional Accounts 1990. Part 1. Estimates of the distribution of personal wealth. Marketable wealth and pension rights of individuals 1976 to 1989. December The use of supply side estimates in the National Accounts. Employment in the public and private sectors. For articles published in earlier issues see the lists in Economic Trends, Nos 304, 328 and 362. Copies of articles may be obtained from the Publications Unit, Central Statistical Office, Great George Street, London SWIP 3AQ, on payment of £2.00 per copy for articles within the last year, and £4.00 per copy for articles prior to this. The appropriate remittance should accompany each order. Cheques, etc, should be made payable to Central Statistical Office. Economic Trends No 459 January 1992 Proposals for reproduction of tables or contents should be addressed to Copyright Section, CSO Publications, Room D.115, Government Buildings, Cardiff Road, Newport, Gwent, NP9 1XG. ISBN 0 11 620520 2 ISSN 0013-0400 Introduction Economic Trends brings together all the main economic indica- Billion’ denotes one thousand million. tors. It contains three regular sections of tables and charts 7. There may sometimes be an inconsistency between a table illustrating trends in the UK economy. and the corresponding chart, because the data may be received too late to update the chart. In such cases it should be assumed ‘Latest developments’ presents the most up-to-date statistical that the table is correct. information available during the month. It is important to 8. There is no single correct definition of money and there are note that data included in this section may not be wholly many liquid assets which are not included in any of the UK consistent with other sections which have gone to press monetary aggregates but which nevertheless need to be taken into earlier. All data in this section are seasonally adjusted unless account on occasions when interpreting monetary conditions. otherwise stated. In most cases estimates are provisional and Consequently, many definitions of money stock are widely used: subject to revision. MO the narrowest measure consists of notes and coin in circula- The main section is based on information available to the tion outside the Bank of England and bankers’ operational depos- CSO on the date printed at the foot of this page and shows the its at the Bank. movements of the key economic indicators. The indicators appear in tabular form on left hand pages with corresponding M2 comprises notes and coin in circulation with the public plus charts on facing right hand pages. Colour has been used to aid sterling retail deposits held by the UK private sector with UK interpretation in some of the charts, for example by creating banks, with building societies and in the National Savings Bank a background grid on those charts drawn to a logarithmic ordinary account. scale. Index numbers in some tables and charts are given on a common base year for convenience of comparison. M4 comprises notes and coin in circulation with the public, together with all sterling deposits (including certificates of de- The section on cyclical indicators shows the movements of posit) held with UK banks and building societies by the rest of the four composite indices over 20 years against a reference private sector. chronology of business cycles. The indices group together indicators which lead, coincide with and lag behind the MS is equal to M4 plus private sector holdings ofc ertain money- business cycle, and a short note describes their most recent market instruments, CTDs, and some national savings instru- movements. The February, May, August and November issues carry further graphs showing separately the move- 9. Symbols used: ments in all of the 27 indicators which make up the composite not available indices. nil or less than half the final digit shown + alongside a heading indicates a series for which measures In addition, quarterly articles on the national accounts appear in of variability are given in the table on page 76 the January, April, July and October issues, and on the balance of indicates that the data has been revised since the last payments in the March, June, September and December issues. edition; Occasional articles comment on and analyse economic statistics the period marked is the earliest in the table to have been and introduce new series, new analyses and new methodology. revised average (or total) of five weeks. Economic Trends is prepared monthly by the Central Statistical Office in collaboration with the statistics divisions of Govern rhe Editor would welcome readers’ suggestions for improve- ment Departments and the Bank of England. ‘nts to Economic Trends. Notes on the tables Central Statistical Office, 4 February 1992 1. The statistics relate mainly to the United Kingdom; where figures are for Great Britain only, this is shown on the table. 2. Similarly, almost all quarterly data are seasonally adjusted; those not seasonally adjusted are indicated by NSA. 3. Some data, particularly for the latest time period, are provi- sional and may be subject to revisions in later issucs. 4. Rounding may lead to inconsistencies between the sum of constituent parts and the total in some tables. 5. A line drawn across a column between two conseculive figures indicates that the figures above and below the line have been compiled on different bases and are not strictly comparable. In each case a footnote explains the difference. CSO Databank Virtually all the series in Economic Trends and the Quarterly Articles may be obtained as part of the CSO Databank Service on tape or disk. The appropriate four digit identifier is ncluded at the top of the column or start of ar ow of figures. This enables users to obtain (in computer-readable form) a much more comprehensive and up-to-date set of long run macro-economic time series data than can be included in this p ublication. The tape format, unlabelled EBCDIC, is the same for all datasets. The disks, either 3!" or 5!/," are written in ASCII text which can be loaded as spreadsheets and viewed using standard spreadsheet packages, such as LOTUS or SMART. Details of the service offered and the schedule of charges may be obtained from the Databank Manager, CSO Branch 16, Room 52/4, Government Offices, Great George Street, London, SW1P 3AQ (telephone 071-270 6386). CSO does not offer direct on-line access for these data but a list of host bur eaux offering such a facility is available on request from CSO. Contents Introduction Symbols and definitions used New director for CSO Table and charts Selected monthly indicators National accounts aggregates Gross domestic product: by category of expenditure Personal disposable income and consumption Real consumers’ expenditure - component categories Retail sales, new registrations of cars and credit business Gross domestic product and shares of income and expenditure Income, product and spending per head Gross domestic fixed capital formation Indicators of fixed investment by manufacturing industry CSO inquiry into investment intentions: manufacturing industry Indicators of fixed investment in dwellings Stock changes Stock ratios Inland energy consumption Index of output of the production industries SOK SrTIICTE OL CIMIDEN BE CONSEMNIE TRIE CORE oo a ois ss snesecsccssesessesoaresscnse seonenacconacbaacensantenoosseshiaognssicsseueososbnsessetseissestd0 k 30 EsS LmeRUaIearAARI AIRED CORSENITER EUCCESOOTA? 1OCBULIEARAT MREBES SONR OI oss oo oc 5s scndhbeescse2cs<cnceoscsessescsiestsiseocies soneisaasucdoveseresdeamestepsns svotoncsussestitaesinsioes 32 Motor vehicle production and steel production and consumption Output per person employed National employment and unemployment Regional unemployment rates Average carmings Visible trade Measures of UK competitiveness in trade in manufactures Balance of payments: current account Sterling exchange rates and UK official reserves Monetary aggregates Counterparts to changes in M4 General government receipts and expenditure Financial transactions of the public sector Summary capital accounts and financial surplus or deficit Appropaation account of indistrialand commercial COMPANIES .......casseseressesovorsscensenssosssessusascssencsccncavenssbabatsoescosssnsetbssebesosssece 62 Capital account and financial surplus/deficit of industrial and commercial COMPANIES ..........scscesceseeseceaeeeenaesaceaeeaeeaseeasensens 64 Financial transactions including net borrowing requirement of industrial and commercial companies UK banks’ lending to UK residents UR Deter 1OdNs BAVANEES GH ACCHPIATICES WIR TERICONUS «.. .....0<s.sccseies cunsss eviiesss ccsesooecdons susconsvesesdrdgnindscetedebussdvecdcenserceveseies 66 Interest rates, security prices and yields A selection of asset prices Number ofp roperty transactions in England and Wales Cyclical indicators for the UK economy Measures of variability of selected economic series Articles United Kingdom National Accounts: third quarter 1991 International comparisons of taxes and social security contributions in 20 OECD countries 1979-1989 Effects of taxes and benefits upon houschold income 1989 Index of sources Latest developments in the economy Release dates of economic statistics as at 24 February 1992 174 Other Articles published in recent Economic Trends inside front cover PLEASE NOTE: In this issue the latest developments in the economy article has been moved to pages 172-173. a iad AE ] e s, specialising in statistics, from the Australian 7 N iversity, Canberra, in 1963, while studying N E W D | R E . x O R ul lic service scholarship (a statistics cadetship). H er Statistican, having worked since graduation in F O R C S O t ralian Bureau of Statistics (ABS), a centralised * gency employing 3,300 permanent staff with an *t equivalent to £75 million. The Prime Minister, with the agreement of the Chancellor of Paper 2 IN st i nehesiied te the Exchequer, has approved the appointment of Mr William 6 me ARS some ts et ci7 pogeie McLennan as Director oft he Central Statistical Office and nett ries a eee sng_ Head of the Government Statistical Service following an r , manne na ee Sa er LIS ithe open competition. Mr McLennan will succeed Sir Jack c Pe >< fama meS s ABS es, ny Hibbest when he retires at the end of February 1992. Mr I statiansd itni intecrnastio;na l statistical activities. McLennan is 49 years old and was born and educated in Australia. Since 1986 he has been the Deputy Australian or of the CSO is a Second Permanent Secretary Statistician. post The Director is Chief Executive of the Central Statistical Office (CSO) which became a Next Steps Executive Agency on 19 November 1991.I t currently employs some 1,100 staff, located in London, Watford and Newport, Gwent. This will increase to some 1,280 duting 1992-93, primarily as a result of the further package of measures to improve the quality of economic statistics announced by the Chancellor of the Exchequer on 19 November. The Head of the Government Statistical Service has_ res- ponsibilities as the Government’s chief adviser on statistics and as the Head of Pro- fession for government statisticians. The chief adviser has the right of access to the Prime Minister, through the head of the Home Civil Service, on matters concerning the validity and integrity of gov- ernment statistics as a whole. Mr McLennan obtained an honours degree in GOVERNMENT STATISTICS IN COMPUTER-READABLE FORM THE CSO DATABANK The Central Statistical Office's Databank service offers regularly updated macro-economic and related statistical data in computer-readable form. Datasets available on magnetic tape or floppy disk (readable in LOTUS or SMART) are: Economic Trends Monthly National Accounts Quarterly Article Quarterly Balance of Payments Quarterly Article Quarterly Acquisitions and Mergers Quarterly Index of Production, Cyclical Indicators and GDP(O) (GDP(O) dataset updated quarterly) Monthly Employment and Earnings Monthly RPI/TPI and Producer Price Indices Monthly Financial Statistics and PSBR Monthly Monthly Digest of Statistics Monthly Monthly Review of External Trade Statistics Monthly UK Balance of Payments (‘Pink Book’) Annually UK National Accounts (‘Blue Book’) Annually @ Economic Trends Annual Supplement Annually @ Consumers’ Expenditure (Floppy only) Quarterly The service is available to: Host bureaux for incorporation in their client services; End-users who require the data for their own use. Flexibility in service Hosts may elect to receive specific datasets; End-users may purchase individual tapes or disks. General Data Inquiries: contact the CSO inquiry points on 071-270 6363/4 or 0633 812973 Further information on Databank content, charges and subscription can be obtained from The Databank manager, Central Statistical Office, Room 52A/4, Government Offices, Great George Street, London SW1P3AQ (telephone: 071-270 6386, 6387 or 6381). CSO does not offer direct on-line access to the data, but a list of host bureaux offering this facility is available on request. Selected monthly indicators Vacancies Volume of at job Average Producer retail Index of Unemployed centres earnings - price Balance of Money sales output of (thou- (thou- whole index of Sterling UK payments: stock M4 + (GB) production sands)+ sands)+ economy materials exchange Official current (£ million) (1985= industries+ (seasonally (seasonally (GB) and fuel rate index reserves balance (seasonally 100)! (1985=100) adjusted) adjusted) (1988=100) (1985=100) (1985=100) ($ million) (€ million) adjusted) FAAM DVIM BCJD DPCB DNAB DZDQ AIPI AIMF AUYN 119.4 108.4 1655.3 166.3 121.6 102.9 39 297 -886 460 743 120.2* 108.2 1670.5 159.4 122.0 104.8 39 060 -273 464 162 119.0 108.1 1 704.8 145.5 122.7 104.1 38 572 -887 467 331 118.4 106.5 1 763.1 138.2 123.5 102.9 38 470 -720 473 103 119.7 106.07 1842.3 133.5 124.2 102.9 38 464 612 474117" 118.6* 105.3 1 891.6 143.6 125.2 102.5 38368 -1244? 476 337 118.5 107.0 1979.8 143.6 126.2 101.8 41 794 -683 479 752 122.8* 107.1 2091.0 141.5 126.5 102.3 42 258 -780 482 247 118.8 104.4 2 173.6 121.8 127.5 103.7 43 591 -192 486 454 118.2 104.1 2241.3 109.3 128.4 103.6 43711 488 979 120.0° 107.4 2 300.3 101.5 128.5 103.9 44 264 488 412 120.8 107.4 2 369.0 104.0 129.1 104.1 44 631 493 062 119.3 105.6 2 424.9 106.6 131.5 102.2 44 691 494 085 119.6* 105.7 2 457.2 106.5 131.7 101.8 44 593 494 551 118.9 106.6 2 474.1 103.5 132.0" 102.0° 44 252 497 574 120.4 105.9 2514.91 109.7 133.0 102.5 43 915 500 010 Dec 119.22 2 546.0 123.7 101.8 44 126 Percentage change, latest three months on previous thr ‘ee months 1990 Aug -0.70 -0.7 1.7 -11.0 25 °1.7 Sep -0.80 -2.8 25 -13.5 2.1 -0.3 Oct -1.40 -2.6 3.5 -14.3 2.1 0.8 Nov -0.90 -2.5 4.7 -15.2 1.8 1.1 Dec -1.00 -1.7 a9 -16.2 1.9 -0.2 1991 Jan “21 9.3 -11.9 1.8 °1.1 Feb -1.4 11.2 -5.1 2.0 -1.5 Mar -0.4t 12.3 2.8 2.0 “1.1 Apr 0.2 13.6 -2.0 1.9 -0.2 May -0.9 13.9 -11.4 1.8 0.8 Jun “1.1 12.6 -22.4 1.7 1.5 Jul 0.2 10.7 -22.6 1.6 1.2 Aug 1.5 9.0 -16.2 1.7 0.2 Sep 0.9 8.0 -4.7 2.1 -1.0 Oct -0.3 6.4 0.6 2.3 -1.8 Nov -0.25 -0.6 5.0 2.4 1.9 -1.3 Dec -0.25 + 3.9 6.2 + -0.6 Percentage change, latest three months on corresponding period of previous year 1990 Aug 0.80 0.6 -7.1 -21.2 10.6 Sep 0.50 -1.6 -4.2 -24.4 10.2 Oct -0.40 -2.2 -1.0 -27.7 9.8 Nov -0.70 -2.5t 2.6 -31.5 9.3 Dec -1.20 3.2 7.1 -33.7 9.5 1991 Jan -1.40 -3.7 12.1 -32.4 9.5 Feb -1.70 -3.3 17.4 -29.8 9.5 Mar -0.60 -3.0 -27.8 9.1 Apr -0.70 -4.1 -31.1 8.8 May -0.90 -5.3 -36.6 8.4 Jun -1.80 -5.9 -42.2 7.9 Jul -1.30 -4.3 -42.8 7.6 -0.25 -3.2 -40.3 7.6 -0.25 -2.3 -36.3 7.9 -0.25 -2.1 -32.8 7.9 0.25 -1.4 -27.8 7.7 3.6 0.25 - -19.2 + 3.4 1 Minor revisions have been made to seasonally adjusted figures previously Sources: Department of Trade and Industry; published. These reflect the routine updating of the seasonal adjustment t of Employment; factor. Central Statistical Office; 2 Provisional. Bank of England National accounts aggregates £ million Index numbers (1985 = 100) Implied gross domestic product At current prices Value indices at current prices Volume indices at 1985 prices deflator Gross Gross Gross national domestic Gross domestic Gross disposable Gross Gross product at domestic product at domestic income at domestic domestic market product at market product at market product at product at prices’ factor cost prices® factor cost prices? market prices factor cost CAOB CAOM DJCL CAON DJCR 304314 261083 85.5 85.1 95.0 325091 280052 91.3 91.3 97.2 356083 306716 100.0 100.0 100.0 382942 326 182 107.5 106.3 103.7 421198 358 297 118.3 116.8 108.1 467863 397292 131.4 129.5 113.4 511413 436 180 143.6 142.2 116.2 550505 477599 154.6 155.7 117.6 96 396 82 019 108.3 107.0 103.8 98 850 84 066 111.0 109.6 105.0 100 611 85 600 113.0 111.6 105.5 103 383 88 043 116.1 114.8 107.1 107 225 91 155 120.4 118.9 109.4 109 979 93 499 123.5 121.9 110.2 111 735 95 030 125.5 123.9 110.6 114.919 97 352 129.1 127.0 112.4 119039 101 086 133.7 131.8 115.2 122170 103824 137.2 135.4 115.2 124775 106495 140.2 138.9 116.4 126469 107772 142.1 140.5 116.4 128 801 109 899 144.7 143.3 115.9 131368 112014 147.6 146.1 116.1 134904 115509 151.5 150.6 116.8 137481 119625 154.4 156.0 117.7 138831 120963 156.0 157.8 118.9 139289 121502 156.5 158.5 117.1 139 541 122 013 156.8 159.1 115.3 143599 123534 161.3 161.1 116.6 145135 124680 163.0 162.6 Percentage change, quarter on corresponding quarter of previous year® 1986 Q3 7.2 6.3 7.2 6.4 k 4.1 8.0 6.9 8.0 6.9 . 5.0 8.3 7.8 8.3 7.7 : 4.3 9.1 9.2 9.1 9.1 ‘ 4.4 11.2 11.1 11.2 ES ‘ 5.6 11.3 11.2 11.3 11.2 : 4.9 11.7 11.0 11.1 11.0 a 5.1 11.2 10.6 11.2 10.6 s 4.6 11.0 10.9 11.0 10.8 ; 3.5 11.1 11.0 11.1 11.1 " 3.9 11.7 12.1 11.7 12.1 . 3.1 10.1 10.7 10.1 10.6 i 2.4 8.2 8.7 8.2 8.7 ; 2.1 7.5 7.9 7.5 7.9 : 1.5 8.1 8.5 8.1 8.4 i 1.9 8.7 11.0 8.7 11.0 : 2.6 7.8 10.1 7.8 10.1 4 0.4 6.0 8.5 6.0 8.5 . -0.9 3.4 5.6 3.4 5.6 -1.3 -2.2 -2.2 4.5 3.3 4.5 3.3 -0.9 3.5 -3.6 4.5 3.1 4.5 3.0 -2.3 -2.1 -2.2 1 These series are affected by the abolition of domestic rates and the intro- 4 Based on the sum of expenditure components of GDP at current and constant duction of the Community Charge. For details, see notes in the UK National prices. Accounts article in this edition of Economic Trends. 5 Also known as the Index of total home costs. 2 “Money GDP.” 6 These estimates of change are based in some cases on less rounded figures 3 Also known as real national disposable income (RNDI). than in the table. Source: Central Statistical Office