GDP quarterly national accounts, UK: April to June 2021

• UK gross domestic product (GDP) is estimated to have increased by 5.5% in Quarter 2 (Apr to June) 2021, revised from the first estimate of a 4.8% increase.

• This release contains data that are consistent with the UK National Accounts, The Blue Book 2021, which will be released on the 29 October 2021, and, as such, data for all periods within this release are subject to revision in line with the National Accounts Revision Policy; further detail on these changes is available in the Revisions to GDP section.

• The level of GDP is now 3.3% below where it was pre-pandemic at Quarter 4 (Oct to Dec) 2019, revised from the previous estimate of 4.4% below.

• In output terms, the largest contributors to this increase were from wholesale and retail trade, accommodation and food service activities, education and human health, and social work activities.

• In Quarter 2 2021, there were increases in all main components of expenditure, with the largest contribution from household consumption, which contributed 4.0 percentage points to the 5.5% increase following the easing of coronavirus restrictions in Quarter 2 2021 when compared with those in place in Quarter 1 (Jan to Mar) 2021.

• The UK’s net borrowing position with the rest of the world reduced to 1.5% of GDP in Quarter 2 (Apr to Jun) of 2021 compared with 1.7% of GDP in Quarter 1 (Jan to Mar) of 2021.

• A rise in household spending of 7.9% saw the household saving ratio decrease to 11.7% in Quarter 2, compared with 18.4% in Quarter 1, which was the second highest on record.

• General government decreased its net borrowing position in the non-financial account to £51.3 billion in Quarter 2 2021 (8.9% of GDP) from £73.2 billion in Quarter 1 2021 (13.1% of GDP); lower borrowing was driven by a rise in income from taxes on products and production of 9.1%, a fall in subsidies of 19.7% and a fall in government final consumption expenditure of 3.0%.

UK gross domestic product (GDP) is estimated to have increased by 5.5% in Quarter 2 (Apr to June) 2021 following the easing of coronavirus (COVID-19) restrictions. This is revised from the first estimate of a rise of 4.8%. The level of GDP in the UK is now 3.3% below where it was prior to the coronavirus pandemic at the end of 2019, revised from 4.4% (Figure 1).

This release contains data that are consistent with the UK National Accounts, The Blue Book 2021, which will be released on the 29 October 2021. In Blue Book 2021 a new framework is introduced to improve how we produce volume estimates of GDP for balanced years as part of the supply use process. This framework includes the implementation of double-deflated industry-level gross value added (GVA) for the first time. We have also included a package of updates for our methods and data. As such, data for all periods within this release are subject to revision in line with the National Accounts Revision Policy. Further detail on these changes is available in the Revisions to GDP section.

An indicative monthly GDP path associated with today’s figures can be found in the associated dataset. These figures indicate that GDP increased across all three months at 2.8% in April, 0.6% in May and 1.4% in June 2021. Monthly figures for July 2021 have also been published, showing that GDP growth slowed to 0.1% in July 2021.

Nominal GDP rose by 3.1% in Quarter 2 2021 revised down from the first quarterly estimate of 3.6%. The pattern of revisions to nominal and real GDP in Quarter 2 2021 reflect improvements to how the Office for National Statistics (ONS) measures non-market output, specifically education and health.

The implied GDP deflator represents the broadest measure of inflation in the domestic economy, reflecting changes in the price of all goods and services that comprise GDP. The implied deflator fell by 2.3% in Quarter 2 2021, revised down from the previous estimate of a fall of 1.1%. The revision is mainly because of changes in government consumption expenditure on education and health.

Annual UK GDP for 2020 is now estimated to have fallen by 9.7%, revised up by 0.1 percentage points from the previous estimate, while nominal UK GDP fell by 4.4% in 2020, revised from a first estimate of 4.8%.

Several countries have published estimates of GDP for Quarter 2 2021. The UK experienced the largest increase in real GDP of these countries in Quarter 2 2021, in part reflecting the timing of the tightening and easing of public health restrictions in the first half of this year. Of the other countries, Italy and Spain had the next largest volume increases in Quarter 2 2021. However, these two countries are the furthest away from their pre-pandemic levels of GDP. The US is the only economy to have recovered to above pre-pandemic levels (0.8%).

Recent analysis highlights the challenges of making international comparisons of GDP at this time and suggests it may be useful to compare nominal and real estimates of GDP, as well as estimates excluding government expenditure. Our initial international engagement has shown differences between National Statistical Institutes (NSIs) in how the challenges of non-market output have been addressed, particularly over the pandemic period, where many, including the ONS, have applied specific additional adjustments to account for changes in the delivery of public services. This means there are some challenges around international comparability at this stage. More information can be found in the article International comparisons of GDP during the coronavirus (COVID-19) pandemic.

Services, production, and construction output all increased in Quarter 2 (Apr to June) 2021 as coronavirus (COVID-19) restrictions continued to ease to varying degrees in England, Scotland and Wales.

Services

There was an increase in services output of 6.5% in Quarter 2 2021, revised upwards from a first estimate of 5.7%. Health and social work contributed 0.6 percentage points to this upward revision in Quarter 2 2021, increasing by 8.6% compared with a first estimate of 2.8%. This revision is because of updated non-coronavirus health activity components. There is more information on health estimates in Quarter 2 2021 in Section 4: Expenditure.

Services output is now 2.2% below Quarter 4 (Oct to Dec) 2019 levels, revised up from 3.5% below. Wholesale and retail trade, accommodation and food service activities, education, and heath provided the largest quarterly contributions to services output growth. Accommodation and food services increased by 87.6% in Quarter 2 2021, while wholesale and retail trade increased by 13.1%. These increases reflected the reopening of indoor hospitality and non-essential retail, and Euro 2020. Other services, which include arts, entertainment and recreation, and other personal activities such as hairdressing, saw a rise of 20.4% in Quarter 2 2021 as restrictions on in-person contact eased. Overall, consumer-facing services increased by 17.6% in Quarter 2 2021.

There was a 20.6% increase in education output in Quarter 2 2021, reflecting the re-opening of schools over the period as in-school attendance rates increased. There is more information on education estimates in Quarter 2 2021 in Section 4: Expenditure, including revisions to these components.

Figure 3 shows the level of output of the services industries relative to its pre-pandemic levels, capturing the impact of revisions. It highlights that the relative industry-level effects are broadly unchanged, although there have been updated data and improvements to how we estimate health output (see Section 4). Arts, entertainment and recreation and other services activities are now slightly stronger because of the addition of value-added tax (VAT) data for Quarter 4 (Oct to Dec) 2020 and Quarter 1 (Jan to Mar) 2021 for the first time.

Production

Production output rose by 1.0% in Quarter 2 2021, revised up by 0.5 percentage points from the first estimate. The increase in production output in Quarter 2 2021 was mainly driven by an unrevised 1.8% rise in manufacturing.

The increase in manufacturing output was driven by food products, beverages and tobacco, and machinery and equipment. There was a fall in the output of the manufacture of transport equipment, which was particularly impacted by microchips shortages. The production of motor vehicles fell by 16.7% in Quarter 2 2021, its second consecutive quarterly fall, as a global semiconductor shortage affecting the production of new cars disrupted supply chains. Output in the manufacture of motor vehicles sub-industry is now 24.0% below its pre-pandemic level (Quarter 4 2019).

Elsewhere in production, there was a contraction of 15.9% in mining and quarrying in Quarter 2 2021, including the oil and gas extraction sub-industry. This reflected the planned temporary closures for maintenance of oil field production sites throughout the quarter.

Figure 4 shows the level of output of the production industries relative to their pre-pandemic levels. There have been some upward revisions in the energy and water supply industries, offset by a downward revision to mining and quarrying output.

Construction

Construction output increased by a revised 3.8% in Quarter 2 2021 and has now broadly recovered to its pre-pandemic output level. The largest contributions to construction output growth in Quarter 2 2021 were from infrastructure, new work, and repair and maintenance. There was weaker construction output across the latter two months of the quarter as some businesses reported limited availability of certain construction products, most notably timber, steel, cement and tiles. However, there was still a rise in output compared with Quarter 1 (Jan to Mar) 2021, because of a low base of construction output in the first quarter.

The latest quarter saw small positive revision (of 0.5ppts) compared with the large revisions to construction output growth for Quarter 2 (Apr to June) 2020 (downward revision of 1.9ppts) and Quarter 4 (Oct to Dec) 2020 (upward revision of 2.3 ppts). These revisions were driven by improvements to VAT data in Q2 2020; and incorporating VAT data for the first time for Q4 2020.

In Quarter 2 (Apr to June) 2021, there were increases in all the main components of expenditure, with the largest contribution from the 7.2% quarterly increase in household consumption. These increases are following the easing of coronavirus (COVID-19) restrictions in Quarter 2 2021 compared with those in place in Quarter 1 (Jan to Mar) 2021. Following revisions to their first estimates, all of the main components of expenditure show broadly the same cumulative position relative to their pre-pandemic levels (Figure 5).

Household consumption

In Quarter 2 2021, household consumption increased by 7.2%, revised from a first estimate of 7.3%. This reflects the easing of COVID-19 restrictions, following a fall of 4.4% in the previous quarter. Household consumption is now 6.3% lower than in Quarter 4 (Oct to Dec) 2019.

The largest contributions in Quarter 2 2021 were from spending on restaurants and hotels and transport, which all performed strongly with the reopening of the economy (Figure 6). This was partly offset by a fall in food and drink consumption expenditure, which may be because of the strong rise in spending on restaurants and hotels. Previous analysis from the Retail Sales Index showed feedback from retailers suggesting that in-store food sales were negatively affected in May by both the reopening of all retail sectors and the relaxation of hospitality restrictions.

Consumption of government goods and services

In Quarter 2 2021, government consumption rose by 8.1%, upwardly revised from a first estimate of 6.1%. The quarterly rise was driven by increases in health and education.

The consumption of education services increased by 32.2% in Quarter 2 2021, following a 18.3% fall in the previous quarter. This reflects an increase in school attendance in all months across the quarter as schools reopened.

This release includes revisions to the adjustment introduced to education output last year to account for remote schooling. The first part consists of incorporating new data collected by the Department for Education on in-school attendance rates by school type for England from September 2020 onwards. The second revises the assumption made for absences where pupils do not attend either in-school or remote learning, to incorporate school type and nation-specific data from before the pandemic, replacing an average assumption for all school types. The third and largest factor involves an improvement to the application of the remote learning full-time equivalency factor, which is calculated separately for primary and secondary schools, and is now applied on an age-specific basis for academies, special schools and publicly-funded places in independent pre-schools.

The main impact of these improvements is to reduce the level of education output in Quarter 2 (Apr to June) 2020 and Quarter 1 2021, the two periods where there was a general policy of school closures. This then has an impact on the growth rates into Quarter 3 (July to Sep) 2020 and Quarter 2 2021.

The consumption of health services increased by 11.4% in Quarter 2 2021. This was because of strong growth in non-COVID-19 health activity, with general practice (GP) appointments showing strong growth in June 2021. This was further boosted by NHS Test and Trace services and the COVID-19 vaccine programme. We have also improved how we estimate this type of non-market output, incorporating new cost-weighted activity indicators. For further information, please refer to the accompanying article. Alongside this improvement, the non-COVID-19 health activity data has seen upwards revisions because of the revised source data, as well as a review of balancing adjustments, which were applied in our first estimate to achieve consistency with monthly gross domestic product (GDP).

Gross capital formation

In Quarter 2 2021, gross fixed capital formation rose by 0.8%, revised up from a 0.5% fall in the first quarterly estimate. This upward revision was mainly driven by business investment which increased by 4.5% in Quarter 2 2021 revised from a first estimate of 2.4%, due to updated survey data. Business investment is still 12.8% below its pre-pandemic levels (Figure 7).

Our Quarterly Capital Assets Survey (QCAS) finds a fall in business responses highlighting uncertainty as a challenge to business investment. This is further supported by independent evidence from the Bank of England’s Decision Maker Panel survey, which found that businesses estimated that their capital expenditure would be 12% lower than normal due to coronavirus in Quarter 2 2021, although overall uncertainty for businesses has improved recently.

Elsewhere in gross capital formation, total change in inventories rose in Quarter 2 (Apr to June) 2021 by just under £3 billion although, excluding alignment adjustment, there was an increase in inventories of £196 million in Quarter 2 2021. The unaligned inventories is revised down from a £2.3 billion increase in the first estimate. Manufacturing industries contributed the most to this change in inventories, particularly in materials stored and fuels. Comments from companies noted an increase of the cost of materials with some companies also increasing stocks to hedge the supply chain problems and in readiness for the end of lockdowns and the economy opening up fully.

Note that alignment and balancing adjustments are typically applied to the inventories component to help balance the different approaches to GDP. More detail can be found in Section 10: Quality and methodology. Therefore, the unadjusted data can provide a better understanding of the change in the inventory position of businesses in the whole economy.

Net trade

The UK’s trade balance (exports minus imports) was 0.1% of nominal GDP in Quarter 2 2021. The latest figures show a further rebound in goods trade, while services trade remained subdued. Some of the increase in trade flows in the second quarter is likely to reflect the recovery following the end of the transition period EU Exit and the easing of COVID-19 pandemic restrictions earlier in the year.

In volume terms, exports of goods and services increased by 6.2% in Quarter 2 2021, revised up from a first estimate of 3.0%. This revision is driven by updated data in both goods and services, in particular from the International Trade in Services Survey. This quarterly increase was driven by a rise of 13.4% in exports of goods, because of rises in chemicals, machinery and transport equipment, and material manufactures. Exports of services fell by 1.8%, particularly in other business services, financial services, and travel services.

Imports of goods and services rose by 2.4% in Quarter 2 2021, revised down from a first estimate of 6.5%. This was driven by a 2.9% rise in imports of goods and a 0.9% rise in imports of services. There was a similar pattern in the flows of imports as seen in exports.

Nominal gross domestic product (GDP) rose by 3.1% in Quarter 2 (Apr to June) 20201, revised down by 0.5 percentage points. This increase in nominal GDP was driven by increases in taxes less subsidies and compensation of employees.

Total compensation of employees rose by 1.8% in Quarter 2 2021, driven by a 1.7% rise in wages and salaries and a 2.4% rise in employers’ social contributions.

Total net taxes less subsidies rose in Quarter 2 2021 by 32.5%. Taxes grew by 9.1% primarily driven by higher value-added tax (VAT) revenues following the re-opening of the economy. Subsidies fell by 19.8% driven by a fall in the Small Business Support Scheme (SMG) and a fall in those that had been furloughed under the Coronavirus Job Retention Scheme (CJRS). This decrease in CJRS was partly offset by an increase in the Self-Employment Income Support Scheme (SEISS).

Growth in the gross operating surplus (GOS) of corporations saw a downward revision of 3.3 percentage points in Quarter 2 (Apr to June) 2021 leading to a fall of 0.8%. Financial corporations saw no growth in Quarter 2, a downward revision from the previous estimate of a 2.1% increase in Quarter 2 2021, and it is now showing no growth on the quarter. This revision was due to survey data replacing forecasts in the latest quarter and the inclusion of Financial Services Survey data, which has improved the coverage and measurement of gross operating surplus of other financial institutions and has led to revisions in all years since 1997. The Other Financial Institutions subsector now accounts for approximately 27.8% of total Financial Corporations’ GOS in 2020, compared to -4.6% in the previous estimate.

Private non-financial corporations GOS contracted by 1.4%, although this mainly reflects the alignment adjustment that is applied to this component for the purpose of balancing the income estimate of GDP (Table 3). When the alignment adjustment is removed, private non-financial corporations’ GOS increased by 1.3% in Quarter 2 2021.

This release includes revisions to the entire time series as part of Blue Book 2021, which will be released on 29 October 2021. In Blue Book 2021 a new framework will be introduced to improve how we produce volume estimates of gross domestic product (GDP) for balanced years as part of the supply use process. This framework includes the implementation of double-deflated industry-level gross value added (GVA) for the first time. This improvement is reflected in this release and will also be reflected in October 2021’s monthly GDP estimates.

Detailed information regarding changes for the financial sector data and double deflation were released on 28 June 2021. Additional analysis was published on 28 July, providing indicative impacts on quarterly average GDP. On 8 September 2021, we published Impact of Blue Book 2021 changes on quarterly and monthly volume estimates of gross domestic product by industry.

In line with our National Accounts Revisions Policy, all periods up to Quarter 2 (April to June) 2021 in this release are open to revision. These revisions incorporate the Blue Book 2021 methodological changes, improved source data and additional updated data as would happen in all quarterly national accounts releases. This includes new value-added tax (VAT) turnover data for Quarter 4 (Oct to Dec) 2020 and Quarter 1 (Jan to Mar) 2021.

Quarter 1 (Jan to Mar) 2020

Gross domestic product (GDP) growth in volume terms is now estimated to have fallen by 2.7%, revised upwards by 0.1 percentage points from the previous estimate.

There have been upwards revisions to all three approaches to measuring GDP. The expenditure revisions are mainly driven by revisions to gross fixed capital formation components. The revisions to the income approach to measuring GDP are mainly because of revisions to compensation of employees and corporations’ gross operating surplus (GOS). The upwards revisions to the output approach is because of revisions to the construction and services sectors.

Quarter 2 (Apr to June) 2020

There have been downward revisions to the output and income approaches to measuring GDP. The output revisions are driven by revisions to the production, construction and services sectors, while the income revisions are primarily as a result of revisions to taxes less subsidies.

Quarter 3 (Jul to Sep) 2020

GDP growth in volume terms is now estimated to be 17.4%, revised upwards by 0.5 percentage points from the previous estimate. There have been upwards revisions to all three approaches to measuring GDP. The growth volume terms in expenditure and output are mainly driven in the education component. Further details can be found in the Section 4: Expenditure of the release.

Quarter 4 (Oct to Dec) 2020

GDP growth in volume terms is now estimated to be 1.1%, revised downwards by 0.2 percentage points from the previous estimate.

The revision is a result of downward revisions to the expenditure and income approaches to measuring GDP, partially offset by the output approach with a small positive revision. The downward revision to expenditure was driven by government and household consumption, and income saw downwards revisions in compensation of employees.

Quarter 1 (Jan to Mar) 2021

GDP growth in volume terms is now estimated to have fallen 1.4%, revised upwards by 0.2 percentage points from the previous estimate.

In the output approach to measuring GDP, which is the lead measure in the latest two quarters, there are upwards revisions to services and production.

There is an upward revision to the expenditure approach driven by revisions in general government, net imports and gross capital formation (GCF). Upwards revisions to GCF are mainly because of revisions to the alignment adjustment, which is applied to the change in the inventories component.

Quarter 2 (Apr to June) 2021

GDP growth in volume terms is now estimated to have grown by 5.5%, revised upwards by 0.7 percentage points from the previous estimate.

In the output approach to measuring GDP, which is the lead measure in the latest two quarters, this upward revision is mainly because of services and is largely a result of a revision to health. For more information see Section 4: Expenditure.

Both expenditure and income components were revised upwards. Within expenditure business investment saw a notable revision, which impacted on GFCF, and the income measure saw positive revisions to all components.

Estimates published for the first time today, 30 September 2021, are consistent with a number of methodological improvements to the institutional sector accounts introduced as part of our annual improvement programme. Indicative impacts of changes to the main financial and non-financial accounts estimates were discussed in our annual article published on 8 September 2021.

Non-financial account net lending and borrowing (seasonally adjusted)

Figure 10 shows that in the non-financial account the UK’s borrowing position with the rest of the world was -1.5% as a percentage of gross domestic product (GDP) in Quarter 2 (Apr to June) 2021, down from -1.7% of GDP in Quarter 1 (Jan to Mar) 2021. This was driven by a rise in the trade in goods balance of £6.1 billion.

Households saw a decrease in their net lending position to 4.7% of GDP in Quarter 2 2021, down from 9.2% of GDP in the previous quarter. This was driven by an increase in household spending of £24.6 billion, a 7.9% increase from Quarter 1 2021 and a 23.1% increase on the recent low, seen in Quarter 2 2020. The reduced lending position this quarter was also driven by a rise in taxes on income and wealth of £4.0 billion, particularly increased payments of taxes on employment. This was partially offset by a rise in wages and salaries of £4.0 billion.

In contrast, general government has reduced its net borrowing position to -8.9% of GDP in Quarter 2 2021 from -13.1% of GDP in Quarter 1 2021. This has been driven by increased income from taxes on products and production, with value-added tax (VAT) receipts increasing by £3.3 billion, and a fall in subsidies paid of £2.1 billion. This was supported by a fall in government final consumption expenditure of £3.9 billion, primarily as a result of decreased spending in health amongst other areas.

Non-financial and financial corporations both increased their net lending position to 1.1% of GDP in the quarter. Within Non-financial corporations, Private non-financial corporations (PNFCs) increased their net property income by £1.9 billion, driven by increased net distributed income of corporations of £9.6 billion. This was partially offset by decreased net reinvested earnings on foreign direct investment of £7.5 billion. Financial Corporations’ net lending increased to £6.5 billion (1.1% of GDP) following lending of £1.1 billion (0.2% of GDP) in Quarter 1. This was driven by a fall in the acquisition less disposal of valuables of £8.6 billion.

Figure 11 shows the household saving ratio decreased to 11.7% in the latest quarter from 18.4% in Quarter 1 2021, which was the second highest on record. Household gross disposable income remained unchanged on the previous quarter, but household final consumption expenditure rose by 7.9% from Quarter 1 2021. Household final consumption expenditure rose as spending on clothing and footwear, transport, and restaurants increased as coronavirus restrictions reduced through the quarter.

Real household disposable income fell by 0.7% in Quarter 2 2021 despite no change in nominal household gross disposable income, as there was a quarterly rise in household inflation of 0.7%.

Financial account net lending and borrowing (not seasonally adjusted)

Households decreased their net lending position by £8.2 billion on the quarter to £27.7 billion. This was driven by a rise in acquisition of loans secured on dwellings of £6.5 billion as the demand for mortgages remained strong ahead of the 30 June cut off for reduced rates of stamp duty land tax. There was also a fall in deposits with UK monetary financial institutions, as household expenditure on some discretionary spending increased.

General government increased its net borrowing position by £20.5 billion in Quarter 2 2021, with central government increasing its issuance of debt securities by £40.0 billion, primarily driven by an increase in the issuing of long-term debt securities. Central Government also decreased their net acquisition of deposits by £21.0 billion in the quarter.

Non-financial corporations marginally increased their net lending position to £8.5 billion in Quarter 2 2021, from £8.3 billion the previous quarter. Private Non-Financial Corporations (PNFCs), a subsector of non-financial corporations, saw an increase in their net lending position to £9.9 billion in Quarter 2 2021. PNFCs increased their deposit assets by £43.0 billion. However, they decreased their net other accounts payable/receivable by £27.5 billion.

Financial corporations switched to net lending of £21.3 billion in Quarter 2 2021 from net borrowing of £16.7 billion in the previous quarter. This was driven by the acquisition of overseas shares of £63.4 billion and a reduction in the issuance of long-term debt securities of £28.1 billion.

Annex table

Significant government interventions affecting the non-financial account of the Sector Accounts from Quarter 2 2020:

• Coronavirus Job Retention Scheme (CJRS) was implemented by the government to support employers maintaining their employees on the payroll
• Self-Employment Income Support Scheme (SEISS) is a grant scheme to support the self-employed with the intention of supporting their business operations and compensating for loss of income
• Small Business Grant Fund and the Retail, Hospitality and Leisure Grant Fund are two grants intended to help businesses with a fall in sales or increased costs as a result of coronavirus

The flow of these interventions through the UK’s institutional sectors is shown in Table 5.

Contribution to growth

Contribution to growth indicates how many percentage points a sector or industry is adding or removing from a given growth rate, usually headline GDP growth.

Chained volume measure

Data in chained volume measures within this bulletin have had the effect of price changes removed (in other words, the data are deflated), except for income data, which are only available in current prices.

Gross domestic product (GDP)

A measure of the economic activity produced by a country or region. Gross domestic product (GDP) growth is the main indicator of economic performance. There are three approaches used to measure GDP:

• the output approach
• the expenditure approach
• the income approach

Index numbers

Data relative to a given base value, which typically refers to a particular year or quarter.

Rolling three-month growth

Rolling three-month growth takes the average level of three consecutive months (for example, April, May and June), and compares it with the average level of the previous three months (for example, January, February, and March). The rolling three-month growth rate is often used alongside the monthly growth rate, as the latter can be more volatile.

For further definitions, please see the Glossary of economic terms.

Reaching the gross domestic product (GDP) balance

The different data content and quality of the three approaches – the output approach, the expenditure approach and the income approach – dictates the approach taken in balancing quarterly data. In the UK, there are more data available on output in the short-term than in either of the other two approaches. However, to obtain the best estimate of GDP (the published figure), the estimates from all three approaches are balanced to produce an average, except in the latest two quarters where the output data take the lead because of the larger data content.

Because of quarterly GDP being a balanced measure of the three approaches, and the output approach focussing solely on growth in gross value added (GVA) and output as a proxy for GDP, there is a difference in 2019 and 2020 data (in both levels and growths terms) between the quarterly publications (average GDP) and the GDP monthly estimate (output approach to GDP). Quarterly GDP is the lead measure of GDP because of its higher data content and inclusion of variables, which enable the conversion from a GVA-added concept to a GDP basis.

Information on the methods we use for Balancing the output, income and expenditure approaches to measuring GDP is available.

Alignment adjustments, found in Table M of the GDP quarterly national accounts data tables, have a target limit of plus or minus £3,000 million on any quarter.

To achieve a balanced GDP dataset through alignment, balancing adjustments are applied to the components of GDP where data content is particularly weak in a given quarter because of a higher level of forecast content. The balancing adjustments applied in this quarter are shown in Table 6. The resulting series should be considered accordingly.

GDP monthly estimate

On 10 September 2021, estimates of Monthly GDP were published for July 2021. The Index of Services, Index of Production and Construction output in Great Britain publications covering July 2021 are also available.

This release sees revisions to all time periods. Although this release focuses on providing the best quarterly estimate of GDP, an indicative monthly path for the Quarter 1 (Jan to Mar) 2020 and Quarter 2 (Apr to June) 2021 is provided in the dataset. A full breakdown of the monthly data consistent with this release will be available in the next monthly GDP release (on 13 October 2020).

The UK National Accounts are drawn together using data from many different sources. This ensures that they are comprehensive and provide different perspectives on the economy, for example, sales by retailers and purchases by households. Further information on measuring gross domestic product (GDP) can be found in the Guide to the UK National Accounts and more quality and methodology information is available in the Gross domestic product (GDP) QMI.

Important quality information

There are common pitfalls in interpreting data series, and these include:

• expectations of accuracy and reliability in early estimates are often too high
• revisions are an inevitable consequence of the trade-off between timeliness and accuracy
• early estimates are based on incomplete data

Very few statistical revisions arise as a result of “errors” in the popular sense of the word. All estimates, by definition, are subject to statistical “error”.

Many different approaches can be used to summarise revisions; the “Accuracy and reliability” section in the Gross domestic product (GDP) QMI analyses the mean average revision and the mean absolute revision for GDP estimates over data publication iterations.

GDP estimates for Quarter 2 (Apr to June) 2021 are subject to more uncertainty than usual as a result of the challenges we faced estimating GDP in the current conditions. Differences in the methods for estimating the output of health and education services across different countries mean GDP may be less internationally comparable during the coronavirus (COVID-19) pandemic and recovery than usual, so should be made with increased caution. For more information, please refer to our recently published blog.