An overall perspective. Fiscal and monetary policy. Components of demand: consumers' expenditure, fixed investment, stockbuilding and foreign trade. Inflation. Balance of payments and the exchange rate. Company profits and liquidity. Unemployment. Individual industries. Forecasts and outturns.

For the OECD area as a whole total output probably rose in 1983 by 2¼ per cent, while the unemployment rate, though rather higher overall than in 1982, declined considerably during the year and the average rate of consumer price inflation was down to less than 5½ per cent from 7¾ per cent in 1982. This means that from every important economic aspect the year was a much better one for the industrial countries than we expected twelve months ago.

A recent issue contained an analysis of the accuracy of the National Institute's forecasts of GDP over the period since the inception of the Review in 1959. This note reports on the application of the same analysis to forecasts of inflation.

In the second half of last year the Central Statistical Office introduced 1980 prices and weights in the calculation of national and industrial production, replacing the earlier 1975-based system. A comparison of the new with the old data reveals certain changes in the structure of the UK economy and industry. This note analyses some of these, concentrating on the period since 1975. A somewhat similar analysis covering the preceding twenty years was published in an earlier Review.

Notes in this Review and in the August number assess the forecasts made by the Institute since 1959 for output and prices. In this note we use data assembled for that purpose in a quite different context. Our purpose here is to consider how discretionary changes in fiscal policy may increase or decrease forecast uncertainty.

The purpose of this article is to give a preliminary econometric analysis of earnings inflation based on the disaggregation of aggregate earnings into four sectors: private manufacturing; private non-manufacturing; public corporations; and central and local government. In the introduction we discuss some of our objectives in analysing wage movements in this way. The second section presents the data. The third section describes the alternative hypotheses to be tested and the research methodology used. The fourth section describes the results of the econometric analysis and in the fifth section we draw tentative conclusions. The data series used are described in more detail in the appendix.