National Accounts: progress report on this year’s changes
30 May 2014 04:30 PM
The Office for National
Statistics (ONS) has published a collection of articles setting out further
details of the changes to the way the UK economy will be measured from
September 2014, and their expected impact.
The new methodologies reflect
significant improvements. Some of these are embodied in the new international
standards adopted by all European Union Member States. Other changes are
designed to ensure that ONS continues to provide the best possible framework
for analysing the economy and comparing it with those of other countries.
They will be backdated to ensure consistency across different
years.
On 16th May 2014, ONS published
an article describing the full set of methodological and other improvements
which will be implemented in this year’s Blue and Pink Books. It said
that ONS would publish further articles, topic by topic, about these
prospective changes before publication of the accounts themselves at the end of
September.
The latest estimate of the total
impact of all the improvements planned for September 2014 shows an increase in
the level of GDP in current prices in 2009 of between 4 and 5%. The changes are
provisionally estimated to account for around half of this increase (around
£33bn, or 2.3%). The impact of the changes on real GDP growth is still
being calculated.
The major changes covered in the
latest articles are listed below:
• The process of
calculating and deflating Gross Fixed Capital Formation, including Business
Investment, will be revised. This is likely to reduce GDP by £5bn in
2009.
• The methodology for
measuring stock building by UK companies will be improved. This would reduce
the level of GDP in 2009 by approximately £5bn.
• Inclusion in the National Accounts of certain illegal activities,
such as prostitution and drug importation, manufacture and consumption; some of
which are not prohibited in certain EU countries and for which comparable
figures are now required. The new estimates would add approximately £10bn
to the level of GDP in 2009.
• A new method for
measuring Non Profit Institutions Serving Households – such as charities
– will also be introduced. It is likely to add £24bn to the level
of GDP in 2009.
• The way the gap
between interest paid to and received from banks, known as FISIM, is measured
will be modified. It is likely this would add £5bn to the level of GDP in
2009.
• Changes to the way
Own-account construction, such as people building their own houses, is recorded
are likely to add £4bn to the level of GDP in 2009.
Various other smaller changes are also being detailed, which are likely to have
minimal impacts on the level of GDP.
Commenting on the improvements,
ONS Chief Economic Adviser Joe Grice said:
“As economies develop and
evolve, so do the statistics we use to measure them. These improvements are
going on across the world and we are working with our partners in Europe and
the wider world on the same agenda. Here in the UK these reforms will help ONS
to continue delivering the best possible economic statistics to inform key
decisions in government and business.”
ENDS
Background
notes
- The full impacts article is
available here: http://www.ons.gov.uk/ons/rel/naa1-rd/national-accounts-articles/impact-o
f-esa95-changes-on-current-price-gdp-estimates/index.html
- Articles giving details of each
change are available here: http://www.ons.gov.uk/ons/guide-method/method-quality/specific/economy/na
tional-accounts/methodology-and-articles/2011-present/index.html
- A separate article outlining
progress on the ongoing programme of work to develop and improve the data
sources used to calculate the output elements of GDP is also published: http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-est
imate/continuous-improvement-of-gross-domestic-product---may-2014/art-continuous
-improvement-of-gross-domestic-product.html
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Statistics. They undergo regular quality assurance reviews to ensure that they
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