Bank of England debates using Spotify habits to gauge consumer confidence
02 May 2018
Andy Haldane, Chief Economist at the BoE. Photo courtesy of the Bank of England.
The Bank of England is investigating ways of using user behaviour data, from the likes of Spotify and Netflix, as a way of gauging consumer confidence. The idea, raised by chief economist Andy Haldane, has been dubbed a useful tool to assess public spending and provide a “window on their soul”.
The proposal was made in a recent speech by Mr Haldane to the Bank about ‘big data’ and the potential of seeing new trends and patterns by looking at less obviously relevant statistics. Early findings have shown a comparable success rate between the new data management and the commonly used Michigan Survey, created in the US, for tracking consumer confidence.
The analysis would take into account book lists, TV & film choices, music, and even computer games as factors in detailing the public’s willingness to spend. Mr Haldane specifically focused on computer games with built-in economies, such as EVE Online and World of Warcraft, as a way of matching the trends of a virtual economy against the real economy and seeing how behaviours differ and what factors cause change.
Not everybody is happy with the ‘outside the box’ thinking currently being tested by Mr Haldane and his colleagues, with former BoE adviser Andrew Sentence saying:
The news isn’t the only shake-up being implemented by Mr Haldane, with the left-wing musician and activist Billy Bragg having given a speech to the Bank about the impact of Quantitative Easing on the UK public and how the money from the Bank of England’s programme "has not got into the real economy".
The Bank of England’s next announcement will be on Thursday 10th May at 11:00am, when it releases the minutes for their April meeting and updates on both interest rates and the state of inflation in the UK.