Staff estimates of potential GDP growth currently at 2-2 1/4 percent are obtained by estimating a production function for non-oil output. The official estimates of potential output growth are 2-2 1/2 percent.
House prices fell by 1.9 percent in the year to June on the Halifax index.
Negative equity in housing was estimated by the Bank of England to amount to about £6 billion in the fourth quarter of 1994.
The determinants of investment demand during the current recovery are examined in Chapter IV.
The collection methodology of trade data was changed in January 1993 with the introduction of the Intrastat system in the EU. The new breakdown of trade figures into prices and volumes is not strictly comparable to the previous methodology.
This index has been recalculated with new weights since February 1995 in order to reflect more recent trade patterns. In particular, the weight of Germany increased from 20.0 percent to 22.5 percent, while the U.S. fell from 20.4 percent to 16.5 percent.