Commentary – Expenditure Aggregates

The onset of the financial crisis led to a sharp fall in UK real investment expenditure, a gentler fall in real consumption expenditure and a slight rise in real current government expenditure. It wasn’t until 2014 that UK real consumption and investment expenditure regained the levels they had reached 7 years before.

Other countries saw a similar pattern in the initial response of the main aggregate expenditure items to the financial crisis: a sharp fall in investment expenditures, a gentler fall in private consumption expenditure and a rise in government expenditure.

In 2014Q1 Real Gross Fixed Capital Formation was still below its 2007 level in the US and (especially) the Euro-area. Real Private-sector Consumption Expenditure had recovered and risen above its 2007 level in the USA but not in the Euro-area. Real Government Current Expenditure was above its 2007 level in the Euro-area though in the US it had been cut back from its 2009 high to very close to its 2007 level.