Major Economic Indicators for the United Kingdom

United Kingdom
IndicatorRelease dates
BOE Interest Rateat the beginning of each month
BOE Inflation Reportat the beginning of February, May, August and November
Unemployment Ratein the middle of each month
MPC Meeting Minutesin the middle of each month
Industrial Production Indexthe first Friday of each month
Retail Salesin the middle of each month
Gross Domestic Product (GDP)quarterly
Nationwide House Price Indexat the end of each month
Name of Indicator
BOE Interest Rate
Release Date
at the beginning of each month
Characteristics of Indicators

BOE interest rate is an economic indicator that has a great influence on the price movements of British Pound Sterling.

BOE interest rate is released by the Bank of England (BOE) on a monthly basis and it is one of the policy tools in the BOE monetary policy. The official interest rate is set by the Monetary Policy Committee (MPC), which is made up of nine members. The decisions on the interest rate are made by a majority vote of the members. This economic indicator has a great effect on the price movements of the British Pound.

The Monetary Policy Committee is made up of nine members: one Governor, three Deputy Governor, one Executive Director, and four External members. We often come across the term “MPC” when we read articles about BOE monetary policy. Now, it is better for you to remember that the term “MPC” refers to the Monetary Policy Committee who makes decisions on monetary policy.

The policy interest rate is an important economic indicator for all countries in the world. The official interest rate of the UK has not been changed since 2009. It may be difficult to predict when the interest rate will be raised. However, as the UK’s economy has been recovering over the past few years, there is a possibility that the official interest rate will be raised in the future.

Name of Indicator
BOE Inflation Report
Release Date
at the beginning of February, May, August and November
Characteristics of Indicators

BOE inflation report analyzes the British economy and prices of commodities. The report is released quarterly by the Bank of England in February, May, August and November. Because large movements are likely to occur when the report is published, it is needed to pay attention to this economic indicator.

In the BOE inflation report, forecasts of the British economy and prices of commodities are depicted in the fan chart. As the report is an important factor in monetary policy decisions, it draws the attention of investors. In addition, the report influences the decisions made by the Monetary Policy Committee (MPC). The MPC usually announces the changes in policy during the month when the inflation report is released.

On November 14, 2007, when the third-quarter BOE inflation report was released, the British pound sterling to Japanese yen exchange rate fell from 232 to 228. It is thus necessary to be cautious about the market movements when the report is released.

Name of Indicator
Unemployment Rate
Release Date
in the middle of each month
Characteristics of Indicators

Unemployment rate is an indicator that shows the percentage of unemployed people in the labor force. The definition of “unemployed people” varies from one country to another. By looking at unemployment rate, one can keep track of the employment situation of the country. It is thus the most important economic indicator that draws the attention of investors. To rank the developed countries in the order of unemployment rate, it is as follows: EU, United States and Japan. Similar to inflation rates, unemployment rate is closely correlated with people’s daily life. It is thus sometimes used for political purposes.

The unemployment rate is released by the Office for National Statistics in the middle of each month. It shows the percentage of unemployed people who actively looking for a job and it does not include pension recipients, welfare-payment recipients and prisoners.

While examining the unemployment rate, there are three statistics that an investor needs to pay attention to: the statistics of the previous month, market forecast prior to the release of unemployment rate, and officially released unemployment rate. Especially, one should look at the market forecast and officially released unemployment rate. If there is a big difference between the released unemployment rate and the market forecast, it is very likely that large movements in the market will occur.

This data is also an important indicator of the performance of a company and sometimes it can influence the monetary policy. In particular, during economic downturns, monetary easing is likely to be carried out immediately after the release of unemployment rate.

In addition to the unemployment rate, the number of applications for unemployment insurance is also released. It is necessary to keep track of the employment indicators as they have a great impact on the exchange rate.

Name of Indicator
MPC Meeting Minutes
Release Date
in the middle of each month
Characteristics of Indicators

The MPC meeting minutes refers to the minutes of the Monetary Policy Committee (MPC) meeting. The meetings are held over two days, on the Wednesday and Thursday at the beginning of the month. The minutes of the meetings are published on the official website two weeks later. In the minutes, votes of the members and reasons for their decisions are included. The Bank of England’s Monetary Policy Committee (MPC) makes decisions on interest rate and the MPC is made up of nine members: one Governor, three Deputy Governor, one Executive Director, and four External members.

While the official interest rate decision is released, the bank announces whether the interest rate is raised, lowered or unchanged. The discussions within the MPC are not revealed. In the minutes of the Bank of England’s MPC meetings, the details of the votes are recorded. The market usually responds differently to the votes.

It is necessary to pay attention to a special case where, even though the official interest rate is lowered, the British pound sterling still rises as the MPC minutes show that the interest rate is decided by a narrow margin.

Name of Indicator
Industrial Production Index
Release Date
the first Friday of each month
Characteristics of Indicators

Industrial production index is an economic indicator that measures the production activities of public utilities industries, such as, mining, manufacturing, electricity and gas. It is released on a monthly basis by the Office for National Statistics.

In countries, such as Japan, the United States, the United Kingdom and Germany, manufacturing sector represents a large portion of GDP. Therefore, industrial production index is usually considered as one of the most important indicators to evaluate the economic performance.

While examining the industrial production index, it is usually compared with the data released in the previous month and the corresponding month of the previous year. When compared to the previous statistics, we thus can know the current situation in the manufacturing industry. As this economic indicator is related to the state of the economy, investors consider it as an essential factor to analyze the economic performance.

Name of Indicator
Retail Sales
Release Date
in the middle of each month
Characteristics of Indicators

Release Date: in the middle of each month

Retail sales, released by the Office for National Statistics, are defined as the sum of retail sales of commodities sold by domestic producers. It is considered as an economic indicator that helps investors to keep track of movements in consumer spending in the UK. It also draws the attention of market participants as it has an impact on the GDP. The monthly retail sales can be revised substantially. Therefore, in addition to the latest data, it is also important to examine the release in the previous month.

To put it simply, retail sales are an indicator that shows how much consumers are spending on goods. Investors pay attention to this indicator in order to have a sense of the economic performance of the country. Because the data are collected on a monthly basis, it is necessary to compare with the data released in the previous month and examine monthly percent changes. This is important for investors to forecast trends in exchange rate.

Name of Indicator
Gross Domestic Product (GDP)
Release Date
quarterly
Characteristics of Indicators

Gross domestic product (GDP) is the sum of the gross value added of domestic production of goods and services within a specific period of time. It is considered as an important indicator of economic growth and production activity in long-term trends. The advanced GDP estimates, as well as the preliminary and final GDP estimates, are released at the end of the month after each quarter ends. It draws the attention of investors as it is the broadest indicator of economic activities and it measures the overall economic performance of the country.

Compared with the previous data, we examine whether there is an increase or decrease in the GDP growth rate to evaluate the economic performance of the country. Investors are more focused on advanced estimates and they examine the personal consumption expenditures, residential investment, fixed investment, inventory investment, and government consumption expenditures and gross investment. As it is a comprehensive indication of the overall growth rate of a country, it is very important for investors to pay attention to this economic indicator.

There are two measures of GDP: nominal gross domestic product (nominal GDP) and real gross domestic product (real GDP). The real GDP is different from the nominal GDP as it accounts for price changes due to inflation.

Name of Indicator
Nationwide House Price Index
Release Date
at the end of each month
Characteristics of Indicators

The Nationwide House Price Index is an indicator of the changes in the prices of residential properties. It is released at the end of each month by the Nationwide Building Society, a top mutual financial institution and the world’s largest building society. A quarterly house price index is also published, which is considered as an useful indication of inflation.

Because the price changes of residential properties are very sensitive to the economic cycle, the economic performance is usually considered as a clue for the prediction of trends in prices of residential housing. It is important to keep track of the indicator. A higher than expected Nationwide house price index number is seen as positive to the British pound sterling and a lower number is taken as negative to the pound.

Besides the Nationwide house price index, there are other house price indices such as Rightmove House Price Index. Compared with the Nationwide house price index, the Rightmove house price index provides an earlier indication of the price trends. The market movements may not strongly correlate with the release of Nationwide house price index. However, it is necessary to note that, when the trends move in the direction of forecasts, large movements are likely to occur.

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