Searches to influence interest rates? Bank of England monitors Google for consumer trends
June 14, 2011
Google Search can be used to predict changes in economic sentiment in the UK, according to a new report from The Bank of England.
Nick McLaren, part of the Bank's Conjunctural Assessment and Projections Division, cowrote the piece with Rachana Shanbhogue of the Structural Economics Analysis Division.
Their research looks at Google Trends data, which is freely available to the public.
Google has already created tools for developing countries to use which measure search volumes for key terms relating to serious medical conditions and alert authorities if those associated with epidemics rise in popularity.
Now the Bank of England researchers claim a similar approach can be taken to tracking events in the UK economy, as a way of bolstering data obtained through other means.
While Google Trends does not reveal exactly how many searches are conducted for a particular query, it offers a barometer-style comparison between the current search volume for a term and its long-term average.
The researchers write: "It is now likely that people who are unemployed, or fear they may soon lose their job, will search on the internet to find out about the benefits system and to search for new jobs.
"So internet search terms may be useful for monitoring the labour market."