Using Google’s Insights for Search tool, researchers discovered that searches for “estate agents” tended to peak a month ahead of rises in house prices.
The Bank also said in its latest quarterly bulletin that the data could help signal unemployment changes.
Searches for “unemployment” and “JSA”, an acronym for jobseeker’s allowance, rose in correlation with the unemployment rate during the 2008-09 recession.
The Bank said: “Internet search data has a number of appealing properties as economic indicators, it is extremely timely and covers a potentially vast sample of respondents.”
The researchers also warned that the data also contained pitfalls: “Internet use remains highly correlated with factors such as age and income, so the sample may not be representative.”
The Bank also noted limitations with the Google data itself, particularly the fact that it only provided percentage changes in the relative popularity of a given search term, but did not give the volume of searches.
The Bank of England’s report concludes: “The Bank will continue to monitor this data as part of the range of different indicators it considers in forming its view about the outlook for the economy of the United Kingdom. As further developments are made in this area, and the backrun of the data increases, this data is likely to become an increasingly useful source of information about economic behaviour.”
