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This assessment stems from the combination of slowing GDP growth and limited evidence of spare capacity opening up. Given the latest data, the uncertainties surrounding them, and what they imply for supply growth in recent years, the MPC has focussed more of its attention in this stocktake on judging the current cyclical position of the economy. Real-time estimates are inherently uncertain and the data underpinning them prone to revision.
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Nevertheless, inflation is likely to rise to 3.7% over the first half of this year. The progress we have made on inflation meant we were able to cut interest rates twice last year, and again today to 4.5%. Higher interest rates have helped slow down price rises, such that inflation has been close to the 2% target since May. Household energy bills are around 25% lower than their recent peaks, and food price inflation has slowed from around 20% in 2023 to 2% in December. So a 2% inflation rate means that a basket of shopping that cost £100 pounds last year now costs £102.
Table 1: Decomposition of estimated potential supply growth (a)
Analysis of the frequency of search terms may indicate economic, social and health trends. In 2011, Google introduced «Google Voice Search» to search for spoken, rather than typed, words. The search engine would also be set up in the garage of Susan Wojcicki’s Menlo Park home. The main purpose of Google Search is to search for text in publicly accessible documents offered by web servers, as opposed to other data, such as images or data contained in databases.
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As a result, the MPC has reduced confidence in key labour market measures, including levels of employment, participation and average hours worked, as well as the signal implied by these measures for the economy’s supply potential. There are significant uncertainties around this assessment and, therefore, the extent to which recent weakness in GDP growth reflects slower supply or demand growth (Key judgement 2 in Section 1). Four-quarter potential supply growth is estimated to have declined from around 1½% at the start of 2024 to around ¾% by the first quarter of 2025.
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Instant search was announced in September 2010 as a feature that displayed suggested results while the user typed in their search query, initially only in select countries or to registered users. This revelation has raised concerns about the dominance of Google in the search engine market and the potential anticompetitive effects of its agreements with Apple. For approximately 40 minutes on January 31, 2009, all search results were mistakenly classified as malware and could therefore not be clicked; instead a warning message was displayed and the user was required to enter the requested URL manually.