Chart 11 plots UK Phillips curves over three periods: 1500-1700 (pre-Industrial Revolution); 1860-1950 (post-Industrial Revolution); 1950-1977 and 1977 to date (post-war period). In each case, wage inflation is measured on the y-axis and an estimate of the output gap on the x-axis. In the post-war period, the Phillips curve conforms to type. Since 1950, it has a clearly positive slope (less slack in the economy is associated with higher wage inflation) and an intercept which is positive (reflecting positive trend inflation). The Phillips curves covering the periods either side of the Industrial Revolution are more interesting. They share one important similarly and have one important difference. The similarity is that both are associated with an average inflation rate of around zero. This is consistent with the price level being broadly stable over these periods. The striking difference is in the slope of the Phillips curve. The post-Industrial Revolution Phillips curve has a conventional upward slope, similar to that operating after 1950. Higher growth or lower unemployment is associated with higher rates of wage and price inflation. The pre-Industrial Revolution Phillips curve is altogether different; it is as flat as a pancake. Indeed, it bears a close resemblance to the Phillips curves which have operated, in the UK and globally, since 2008. There are many potential explanations of this flatness in the pre-Industrial Revolution Phillips curve, including noisy data. And its similarity with the present-day Phillips curve may be purely coincidental.
24  All speeches are available online at www.bankofengland.co.uk/speeches  24  Chart 17: Investment intention indicators Percentage change on a year ago  20 10 0 -10 -20 -30  2007  2008  2009  2010 BCC  2011 CBI  2012 2013 Agents  2014 EEF  2015 ONS  2016  2017  Sources: Bank of England, BCC, CBI/PwC, EEF, ONS and Bank calculations. Notes: (a) ‘ONS’ is the chained-volume measure of business investment. Data are to 2017 Q1 and adjust for the transfer of the nuclear reactors form the public corporation sector to central government in 2005 Q2. (b) EEF and CBI measures are net percentage balances of respondents reporting that they have increased planned investment in plant and machinery for the next twelve months. EEF measure corresponds to the manufacturing sector and CBI sectoral surveys are weighted together using shares in real business investment. (c) BCC measure is the net percentage balance of respondents reporting that they have increased planned investment in plant and machinery. Sectoral surveys are weighted together using shares in real business investment. Data are non-seasonally adjusted. (d) Agents measure shows companies’ intended changes in investment over the next twelve months, with sectoral surveys weighted together using shares in real business investment. Last observation in the quarter.