Monday, February 20, 2012
The Bank and GDP data
Posted by David Smith at 07:15 PM
Category: Thoughts and responses

gdpmktfeb12large.gif

The above is a chart from last week's Bank of England inflation report. The black line shows the current published numbers from the Office for National Statistics. The green fan shows, not only the Bank's forecasts, but also its own estimates of past growth. The sharp-eyed will note that there is a clear expectation at the Bank that, as in every previous cycle, the initial GDP figures will be revised higher. Mentioning no names but you would expect anybody who had worked at the Bank to be aware of this.

The bible for the national accounts is, of course, the Blue Book, the latest edition of which was published last November. It revised up the average annual growth rate from 1997 to early 2011 from 1.9% to 2.2%. There is no reason to believe that past revision patterns will be any different in the future. Indeed, this is basic stuff.