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National Accounts changes: updated GDP growth and Balance of Payments estimates

The Office for National Statistics (ONS) has released the latest set of articles setting out improvements to UK National Accounts and their estimated impacts. The new figures give more information about how the official picture of the UK economy will change following the introduction of the planned improvements.

This year, there are an unusually large number of methodological improvements being made to the UK National Accounts. These improvements are part of an international agenda, which will help ensure ONS continues to measure the UK’s changing economy to a high standard.

The latest information includes updated estimates of annual current price GDP levels for 2010-2012 and annual real GDP growth for 2010-2012, taking account of the previously announced changes to the National Accounts framework, as well as the latest available data. In addition, quarterly GDP growth figures for 1997-2012 are also being published.

Over the period 1998 to 2012, revisions to estimated annual real GDP for individual years go in both directions. On average, growth has been revised up by 0.1 percentage points per year. During the recent economic downturn, growth was less weak than previously estimated while, coming out of the downturn, growth has been stronger. However, the length of the downturn remains unrevised. The recent downturn has been the deepest since ONS records began in 1948. The recovery has also been the slowest.

ONS Chief Economist Joe Grice said:

“Despite the wide ranging improvements underpinning the new estimates, the broad picture of the economy has not changed much. Although the downturn was less deep than previously estimated and subsequent growth stronger, it remains the case that the UK experienced the deepest recession since ONS records began in 1948 and the subsequent recovery has been unusually slow.

“Over the period 1998-2012, the overall size of revisions remains small at an average of 0.1 percentage points per year.”

A separate article sets out the impact of the changes on the Balance of Payments for 1997-2009. It shows that the impact on the current account has been relatively small across the period with the exception of 2008 and 2009, where the deficit widens significantly, reflecting changes to the treatment of banks’ profits in compiling foreign direct investment.

Additional articles have also been published which include the estimated impact of the changes on the Sector and Financial Accounts and estimates of the impact of the new method for inflating imputed rental data. The Economic Review, also published today, sets out and analyses the impact of the new methodologies and data being introduced in Blue Book 2014.

Today’s releases are the latest of a series of articles detailing the Blue Book and Pink Book improvements which will be introduced  on 30 September as part of the 2014 Blue and Pink Books The previous articles are as below:

• The overall package of improvements was described on 28 April 
• Articles on 29 May described the impact on current price GDP from those improvements not related to new international standards (‘ESA 2010’, for short) 
• Articles were published on 10 June giving estimates of the impact on the level of current price GDP from the improvements due to the implementation of ESA 2010 
• On 30 June, articles described the impact of the changes on annual growth in the headline measure of GDP over the period 1997 to 2009 
• Articles on 9 July detailed the impact of the changes on the Sector & Financial Accounts and Balance of Payments, as well as an article comparing the impact of the UK’s National Accounts changes with those being implemented in other countries 
• On 23 July an article was published giving details of the impacts of the changes on the expenditure and income components of GDP 
• Further detail of the impact of the changes on the expenditure components of GDP were set out on 12 August

Background notes

  1. This month’s ONS Economic Review, which sets out and analyses the impact of the new methodologies and data being introduced in Blue Book 2014, is available here: http://www.ons.gov.uk/ons/rel/elmr/economic-review/september-2014/index.html
  2. The full article containing information on the new estimates of growth from 1997-2012 is available here: http://www.ons.gov.uk/ons/rel/naa1-rd/national-accounts-articles/impact-of-upcoming-improvements-on-estimates-of-real-and-nominal-annual-and-quarterly-gdp--1997-to-2012/index.html
  3. The full article setting out the impact of the new Balance of Payments Manual (BPM6) and improvements to the National Accounts on Balance of Payments and international investment position estimates is available here: http://www.ons.gov.uk/ons/rel/naa1-rd/national-accounts-articles/impacts-of-changes-to-the-measurement-of-the-balance-of-payments-as-a-result-of-the-introduction-of-bpm6/index.html
  4. The full article setting out the new method for measuring nominal (current price) rentals data in the UK National Accounts is available here: http://www.ons.gov.uk/ons/rel/naa1-rd/national-accounts-articles/revisions-to-household-expenditure-on-rentals-to-align-with-the-consumer-price-index-with-housing/index.html
  5. The full article estimating the impact of National Accounts changes on the Income and Capital Accounts is available here: http://www.ons.gov.uk/ons/rel/naa1-rd/national-accounts-articles/detailed-assessment-of-changes-to-sector-and-financial-accounts-1997-to-2009/index.html
  6. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. © Crown copyright 2014.

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  7. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Channel website: https://www.ons.gov.uk/

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