##ionately on durable goods ( as one might expect of any one - off source of income ). the semiconductor sector may represent the starkest example of this collision between stronger demand and weaker supply. chart 12, for example, plots shipments of pcs by the major five global producers against exports of semiconductor components from japan. the first rose significantly through the course of last year, boosted by the general shift away from consumer services to goods, and in particular the necessity of working more from home and, for firms, of moving activity online. but semiconductor production contracted in japan and other major producing countries through the latter part of last year and the result was a marked drawdown in inventories and a sharp rise in prices. chart 12 : demand for pcs rose steeply last year but supply of components declined source : goldman sachs, see goldman sachs ( 2021, see footnote 6 ) for further detail. changes on a year ago. semiconductor components include wafers, flash memory and dram memory, weighted by 2017 shipment values. this has now begun to appear at the retail level in prices of goods that rely on computer chips – computers themselves ( obviously ) but also audio - visual goods and new cars ( chart 13 plots their average inflation rates in late march, a large container ship ( the ever given, a quarter of a mile long ) was buffeted by strong winds and ended up wedged across the width of the canal. it took six days to dislodge the vessel and re - open the canal. a useful summary of the problems in shipping supply in general can be found here : “ global shipping container shortage : the story so far ”, ship technology, 29 april 2021. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice in the us and uk ). the resulting problems and delays in car production have had knock - on effects on prices of second - hand vehicles, especially in the us. chart 13 : prices of goods that use computer chips have risen sharply in the us and uk sources : ons, bea and bank calculations. chart based on goldman sachs ( 2021, see footnote 6 ). 12m inflation rates for semiconductor - intensive spending categories : audio - visual goods, photographic / optical equipment, computers, household appliances and new cars. excludes new cars before 2011 ; earlier data rescaled for comparability. wholesale goods - price inflation likely to soften in time for how long

now, it ’ s still a long way from where it was before all this began. growth of 5 % in q2 would still leave uk gdp 4 % lower than at the end of 2019. and economic contractions don ’ t normally lead to higher inflation. we can identify a number of contributory factors, things that help to account for this contrast, right off the top. one is base effects. arguably, comparing economic growth over the past eighteen months with the change in prices over the past twelve isn ’ t quite fair. one of the reasons annual inflation has risen so steeply through this spring is that prices of goods ( energy in particular ) fell significantly a year earlier, during the first phase of the pandemic. over the past year and a half as a whole, so including that initial drop, headline and core cpi have both risen at an average ( annualised ) rate of 1½ - 1¾ %, a little weaker than pre - pandemic rates. we know too that quite a bit of the drop in output has been matched, on the supply side, by the significant numbers on the furlough scheme. the cjrs has successfully protected millions of jobs. but, because those on furlough aren ’ t available for others, it ’ s had the effect of matching part of the decline in labour demand with a decline in labour supply. during the second quarter of this year it ’ s likely that an average of over 2½ million people were furloughed – more than 7 % of the workforce. some of those employees were actually working, at least on a part - time basis, and furloughed jobs tend to be less well paid than the average. but, taking account of these things, the scheme was still holding back effective supply in the economy by an estimated 2 % - 3 % in q2 ( chart 1 ). all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice finally, we also know that the share of the population either in or actively looking for work – the so - called participation rate – has also fallen ( the red line in chart 2 is the year - on - year change ). this too will have reduced the supply of labour. chart 1 : by protecting jobs cjrs had the effect of reducing labour supply alongside labour demand1, 2 sources : ons, hmrc, obr and bank calculations.