Bank-ing on Google For Economic Insight

June 22, 2011Sectorby EW News Desk Team


In a move that would seem to underscore the prevailing influence of the Internet, the Bank of England is now turning to Internet search data as a key source for tracking the latest economic trends and indicators.

According to its Q2 2011 Quarterly Bulletin:

“Internet search data have the potential to be useful for economic policy making. Monitoring current economic activity closely is an important aspect of policymaking, but official economic statistics are generally published with a lag

Internet search data have a number of appealing properties as economic indicators. They are extremely timely and cover a potentially vast sample of respondents (approximately 60 percent of the adult population in the United Kingdom now use the internet every day). In contrast to most traditional survey methods, they are collected as a by-product of normal activity, rather than requiring individuals or firms to respond to survey questions after the event. This can avoid problems associated with non-response or inaccurate responses. And it also means that information is continually collected on a wider range of issues, rather than just on a few pre-determined questions. As a result, search data can help analyse issues that arise unexpectedly.”

For its latest report in the quarterly bulletin, the Bank of England utilised Google Insights for Search to analyse the labour and housing markets in the UK.

To achieve this, they began by inputting search terms related to labour and housing into Google Insights, before comparing it to data from the UK Office for National Statistics.

What they found was that there was a correlation between the volume of certain search terms on Google and economic data from traditional surveys.

The Bank of England hopes that through Internet search data, they would be able to track in real-time consumer and economic behavioural patterns. Furthermore, it is likely that the data can be used to predict potential economic trends.

Similarly, has also introduced a new online tool designed to track worldwide consumer confidence in real time.

Related: Crowdsourcing the Future: Introducing Global Real-Time Consumer Confidence Tracking

By tracking the perceptions of citizens around the world - in regards to employment, business and economic conditions – hopes to be able to present its readers with an analysis tool for monitoring consumer confidence on a daily basis and predicting future events in the world economy.

As the Bank of England’s report suggests, “As further developments are made in this area, and the back-run of the data increases, these data are likely to become an increasingly useful source of information about economic behaviour.

Answer 9 Simple Questions About Your Nation’s Economy to Access’s Global Real-Time Consumer Confidence Index

Read the Full Bank of England Report

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