Economic indicator glossary
The terms used on the economic and financial indicator pages, defined in one or two sentences. No figures here: every figure lives on its own page, next to the official source it came from.
- Policy rate
- The interest rate a central bank sets to steer the economy, and the floor under most other rates in that currency. It moves only when the rate-setting committee decides, so its history is a series of steps rather than a continuous line.
- Yield
- The annual return an investor earns by lending money through a bond, expressed as a percentage of its price. Price and yield move in opposite directions: when a bond gets cheaper, its yield rises.
- Year-on-year inflation
- The change in a price index against the same month a year earlier. It can fall while prices are still rising, because it measures the speed of the increase, not the level of prices.
- Basis point
- One hundredth of a percentage point. Central banks and markets talk in basis points because "a 0.25 point cut" and "a 25 basis point cut" are the same thing, and the second wording leaves no room for doubt.
- Real rate
- An interest rate after inflation is taken out, roughly the quoted rate minus the inflation rate. A savings account paying less than inflation has a negative real rate, which means the money loses purchasing power.
- Yield curve
- The set of yields on government debt across maturities, from a few weeks to thirty years. When short maturities pay more than long ones the curve is inverted, a pattern markets read as a slowdown signal.
- National average
- A figure averaged over a whole country, and therefore not a quote for you. Your own mortgage rate, salary or grocery bill depends on your region, your lender or your shop and will sit above or below the average.
- Revision
- A later correction of a published figure, as the statistics office receives more complete data. Values marked provisional or estimated are the ones most likely to change, which is why the page keeps the source flag.