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<p>Acknowledgements ix</p> <p>Introduction xi</p> <p>Surprise Indices xii</p> <p>Mapping a New Landscape xix</p> <p><b>1 Surveys 1</b></p> <p>Surveys and Behavioural Economics 2</p> <p>Types of Survey 3</p> <p>Business Surveys 3</p> <p>Consumer Surveys 21</p> <p>Conclusion 28</p> <p><b>2 Economic Growth 31</b></p> <p>Economic Growth Through the Ages 31</p> <p>GDP 34</p> <p>What Is GDP? 39</p> <p>Breaking Down GDP 42</p> <p>Why Is GDP Important? How Is It Measured? 43</p> <p>Index Numbers of GDP and the Price Deflators</p> <p>Used in Calculating Them 45</p> <p>Detailed Breakdown of the GDP Measures 48</p> <p>AMarket Link 61</p> <p>Components of GDP 62</p> <p>Conclusion 64</p> <p><b>3 Labour Markets 65</b></p> <p>Employment Trends 66</p> <p>What Has Driven the Change? 70</p> <p>Consequences for Economic Growth 72</p> <p>Phillips Curve Shows no Durable Trade-Off Exists 74</p> <p>NAIRU Matters More 75</p> <p>Employment Measures 76</p> <p>Why We Measure Unemployment 77</p> <p>The Nature of Unemployment 79</p> <p>The Impact of Demographics on Labour Markets 81</p> <p>Vacancies 90</p> <p>Changing Labour Patterns 92</p> <p>The UK in Comparison to Its Global Competitors 96</p> <p>How Do We Extract Value from This? 96</p> <p>Conclusion 98</p> <p><b>4 Inflation 99</b></p> <p>What Is Inflation? 99</p> <p>The History of Inflation 99</p> <p>Causes of Inflation 101</p> <p>Earnings/Wage Inflation 109</p> <p>Price Basket 110</p> <p>How Is Price Inflation Measured? 110</p> <p>GDP Deflator 111</p> <p>Why so Many Measures of Inflation? 112</p> <p>A Focus on the CPI and RPI 118</p> <p>Why Is Inflation Important? 122</p> <p>Deflation 123</p> <p>Other Measures of Inflation Targeting 123</p> <p>How Can We Extract Value from This? 125</p> <p>Conclusion 125</p> <p><b>5 Monetary Statistics 127</b></p> <p>Monetary Policy and Inflation Management 130</p> <p>The UK in a Global Context 133</p> <p>Central Bank’s Role 133</p> <p>What About the Bank of England? 135</p> <p>How Monetary Policy Works in the UK 136</p> <p>Decomposition of Money 144</p> <p>Why Does Money Supply Matter? 149</p> <p>Why Is This Sort of Analysis Useful? 155</p> <p>A Brief History of Monetary Targeting 155</p> <p>How Do We Extract Value from This? 158</p> <p>Conclusion 158</p> <p><b>6 Fiscal Indicators 161</b></p> <p>A Brief History of UK Fiscal Policy 163</p> <p>Measuring Government Debt 164</p> <p>Fiscal Policy Impact and Terminology 166</p> <p>The Impact of Government on Markets 168</p> <p>Fiscal Policy and Growth 168</p> <p>The Data We Should Consider 169</p> <p>Fiscal Policy in Boom and Bust 170</p> <p>Market Relevance 173</p> <p>Bank of England Regains Regulatory Powers 176</p> <p>What Role Does the Office for Budget Responsibility Play in the Fiscal Policy Process? 180</p> <p>The Monetary Policy Committee 181</p> <p>Forward Guidance – Another Bank Innovation 183</p> <p>The Debt Management Office’s Role 185</p> <p>Comparison of International Debt 188</p> <p>Fiscal Targets Add Credibility to Debt Reduction 190</p> <p>How Can We Extract Value from This? 192</p> <p>Conclusion 193</p> <p><b>7 Global Trade Statistics 195</b></p> <p>What Is a Country’s Balance of Payments? 197</p> <p>Why Do We Measure the Balance of Payments? 197</p> <p>What Does It Mean? 198</p> <p>The Concept of the Balance of Payments 199</p> <p>UK Is Not Alone in Having a Trade Deficit 204</p> <p>A Chronic Goods Deficit 208</p> <p>A Chronic Services Surplus to Offset (Almost) the Trade Deficit 210</p> <p>The Ever-Changing Pattern of Visible and Invisible Trade 213</p> <p>Balance of Payments and GDP 222</p> <p>Shifting Trade Patterns 222</p> <p>How Can We Extract Value from This? 224</p> <p>Conclusion 225</p> <p>Conclusion 227</p> <p><b>Appendices</b></p> <p>Appendix 1 Surveys 235</p> <p>Appendix 2 Bank of England: Agents’ Summary of Business Conditions (January 2014) 241</p> <p>Appendix 3 Inflation: Contributions to Change in the 12-Month Rate 247</p> <p>Appendix 4 Voting on Interest Rates by the Monetary Policy Committee – 1997 to January 2014 249</p> <p>Appendix 5 Voting on Asset Purchases Financed with central bank reserves by the Monetary Policy Committee – March 2009 to January 2014 251</p> <p>Bibliography 253</p> <p>Index 255</p>

<p><b>Trevor Williams</b> joined Lloyds Banking Group from the UK Civil Service after doing some lecturing. Trevor is currently the Chief Economist at Lloyds Bank, Commercial Banking. He regularly writes articles for publications and appears in the financial press and on television to represent economic views. Trevor is a member of the Institute for Economic Affairs Shadow Monetary Policy Committee, made up of City economists and academics. This is the oldest ‘shadow’ MPC, set up two months after the official MPC began in 1997. He is a visiting Professor, Banking and Finance, Derby University.</p> <p><b>Victoria Turton</b> graduated from the universities of Sheffield and Manchester with degrees in History before joining the Bank of Scotland Corporate. She is currently a Senior Copywriter at Editions Financial as well as a freelance writer and editor. She lives in North Yorkshire and is married with two sons.</p>

In the wake of an unprecedented financial crisis, of a magnitude not seen for almost 100 years, understanding how key economic and market statistics drive financial market trends is vital for students, traders and market practitioners. <p>Global economics has encountered a seismic shift. In the UK, 16 years of uninterrupted growth ended in double-dip recession. The US encountered its biggest ever recession. Emergent economies are jostling to join the top rank and we are witnessing the rise of alternative financial centres and a new global financial market landscape. These trends are leading to rapid and unprecedented change. New technology is making markets more accessible and transparent and investment decisions are instantly reflected in market pricing, creating scope for greater market volatility. Many of these decisions are made on a data driven, statistics based materiality. Unfolding news, as reflected in economic and market data, is leading to a greater need to understand these figures, and what different interpretations can mean for investable assets.</p> <p><i>Trading Economics: A Guide to the Use of Economic Statistics for Traders and Practitioners</i> cuts through the economic and market noise, delivering a clear view of how statistics interact to create and demonstrate economic trends and movements. Of equal value to market traders and practitioners, financiers, government officials, financial journalists, economics and business students as to the interested observer, the book is presented in an easy to reference layout, using language that eschews jargon. It provides a unique insight into the statistics that have an impact on global financial markets and offers a hands on guide for those who want to understand how financial statistics work, and how to profit from them in the widest sense.</p>

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