GDP quarterly national accounts, UK: July to September 2021

Revised quarterly estimate of gross domestic product (GDP) for the UK. Uses additional data to provide a more precise indication of economic growth than the first estimate.

This is the latest release. View previous releases

22 December 2021

Please note we have amended the wording of the “UK's net borrowing position with the rest of the world” headline to remove ambiguity. The point now reads: The UK’s net borrowing position with the rest of the world increased to negative 4.3% as a percentage of GDP in Quarter 3 2021 compared with negative 2.4% of GDP in Quarter 2 (Apr to June) 2021.

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Cyswllt:
Email Niamh McAuley

Dyddiad y datganiad:
22 December 2021

Cyhoeddiad nesaf:
11 February 2022

1. Main points

  • UK gross domestic product (GDP) is estimated to have increased by 1.1% in Quarter 3 (July to Sept) 2021, revised from the first estimate of a 1.3% increase.

  • The level of GDP is now 1.5% below where it was pre-coronavirus (COVID-19) at Quarter 4 (Oct to Dec) 2019, revised from the previous estimate of 2.1% below, because of upward revisions to growth in 2020; for more information see the Revisions to GDP section.

  • Annual UK GDP in 2020 is now estimated to have fallen by 9.4%, revised from a first quarterly estimate of negative 9.7%.

  • In output terms, the largest contributors to the increase in Quarter 3 2021 were hospitality, and arts, entertainment and recreation following the further easing of restrictions and reopening of the economy during this period; production and construction both fell.

  • Household consumption rose by an upwardly revised 2.7% in Quarter 3 2021 and made the largest contribution to expenditure; there was a fall in underlying inventories, likely reflecting some of the recent supply chain challenges; and a negative contribution from net trade.

  • The UK’s net borrowing position with the rest of the world increased to negative 4.3% as a percentage of GDP in Quarter 3 2021 compared with negative 2.4% of GDP in Quarter 2 (Apr to June) 2021.

  • The household saving ratio decreased to 8.6% in Quarter 3 2021 compared with 10.7% in Quarter 2.

  • Households’ net lending position in the non-financial account decreased to £13.5 billion (2.3% of GDP) in Quarter 3 2021 from £23.8 billion in Quarter 2 (4.1% of GDP); the decreased lending was driven by a rise in household spending of 3.3% from the previous quarter.

  • Non-financial and financial corporations both decreased their net lending position to 0.6% as a percentage of GDP in Quarter 3 2021.

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GDP estimates for Quarter 3 2021 are subject to more uncertainty than usual as a result of the challenges we faced estimating GDP in the current conditions.

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2. Headline gross domestic product (GDP) figures

UK gross domestic product (GDP) is estimated to have increased by 1.1% in Quarter 3 (July to Sept) 2021, revised down from the first quarterly estimate of a 1.3% increase. This follows a revised increase of 5.4% in Quarter 2 (Apr to June) 2021 following the easing of coronavirus (COVID-19) restrictions. The level of real quarterly GDP in the UK is now 1.5% below where it was prior to the coronavirus pandemic at the end of 2019, revised from 2.1% (Figure 1).

In line with the National Accounts Revisions Policy, all quarters from Quarter 1 (Jan to Mar) 2020 onwards are open for revision. The revisions made in this publication reflect a variety of factors, including new survey data, new Value Added Tax (VAT) turnover data and updates to seasonal factors. More information can be found in the Revisions to GDP section.

An indicative monthly GDP path associated with today’s quarterly figures can be found in the associated dataset. For the latest quarter, those figures indicate that monthly GDP fell by 0.1% in July, and increased by 0.1% in August and 0.6% in September 2021. Monthly figures for October have also been published, showing that monthly GDP grew by 0.1%.

Nominal GDP rose by a revised 1.6% in Quarter 3 2021.

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 rose by 0.5% in Quarter 3 2021, revised from a first quarterly estimate rise of 0.2%. Compared with the same quarter a year ago, the implied GDP deflator rose by 0.6%. This was driven by a rise in the annual household implied deflator of 2.8%, partially offset by a fall of 7.1% in the government implied deflator.

Annual UK GDP for 2020 is now estimated to have fallen by 9.4%, revised up by 0.3 percentage points from the previous estimate. Nominal UK GDP fell by 4.6% in 2020, revised from a first quarterly estimate fall of 4.4%.

The latest data mean the three measures we use to estimate GDP growth (output, expenditure, and income) are now showing a closer alignment for growth across the last seven quarters. This has narrowed the difference between monthly and quarterly GDP measurements relative to the pre-coronavirus level. More information can be found in the Measuring the data section. Further information on the challenges of measuring GDP during the pandemic and the different levels of uncertainty surrounding each measurement approach are provided in our previous publication.

The United States is the only economy from the selected countries to have recovered above pre-coronavirus levels in real terms (Figure 2). France is now 0.1% below its pre-coronavirus level. In nominal terms, all countries selected have seen their economies recover to above their Quarter 4 (Oct to Dec) 2019 levels except Spain.

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.

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3. Output

Services output rose in Quarter 3 (July to Sept) 2021 as coronavirus (COVID-19) restrictions continued to ease to varying degrees in England, Scotland and Wales. Construction and production output, however, fell in Quarter 3.

Services

There was a rise in services output of 1.4% in Quarter 3 2021, revised down from a first quarterly estimate of 1.6%. Services output is now 0.6% below Quarter 4 (Oct to Dec) 2019 levels.

This growth was mainly driven by increases in accommodation and food service activities (30.7%) and arts, entertainment and recreation (18.7%), following the relaxation of almost all coronavirus public health restrictions on 19 July 2021, including the re-opening of indoor hospitality by varying degrees in England, Scotland and Wales. These were partially offset by wholesale and retail trade, which fell by 2.4%. Elsewhere, health and social work fell by 1.3% in Quarter 3, driven by a 1.6% fall in human health activities. More information is provided in Section 4: Expenditure.

Figure 3 shows the performance of services sub-sectors relative to their pre-coronavirus levels. Notably, the arts, entertainment and recreation sector has now recovered to above its pre-coronavirus levels by 2.4%, revised from a first estimate of being 5.4% below pre-coronavirus levels. This revision is because of the inclusion of Value Added Tax (VAT) data for Quarter 2 (Apr to June) 2021 for the first time. Most sectors have shown an improvement in their performance compared with their initial estimate except for wholesale and retail trade, and human health and social work.

Figure 3: The services sector in Quarter 3 (July to Sept) 2021 is now a revised 0.6% below its pre-coronavirus level (Quarter 4 2019), in part reflecting upward revisions in arts, entertainment and recreation

Percentage change, Quarter 4 (Oct to Dec) 2019 to Quarter 3 (July to Sept) 2021

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Notes:
  1. Chart shows the percentage change in the services sector in Quarter 3 (July to Sept) 2021 compared with Quarter 4 (Oct to Dec) 2019.
Download the data

.xlsx

Production

Production output fell by 0.1% in Quarter 3 2021, revised down from a rise of 0.8% from the first estimate. The sector has continued to face supply chain challenges highlighted in our previous monthly GDP release.

There have been revisions to electricity, gas, steam, and air conditioning supply, reflecting revised data for mostly electricity for the month of September. These revisions have led to a weaker performance for the production sector relative to its pre-coronavirus level (Figure 4).

The fall in production output was driven by electricity, gas, steam, and air conditioning supply (negative 7.3%) following exceptionally high levels in May 2021 (last higher in December 2001), mainly resulting from adverse weather conditions boosting demand for energy.

Elsewhere in production, the manufacturing sub-sector also fell (-0.7%) in Quarter 3 2021; most of this was due to a 3.5% fall in Manufacture of rubber and plastic products. Falls were seen in 8 out of 13 manufacturing sub-sectors. Other large drivers of the fall in manufacturing were: manufacture of basic pharmaceutical products and pharmaceutical preparations, manufacture of machinery and equipment not elsewhere classified, and manufacture of transport equipment.

Output in the manufacture of motor vehicles fell for a third consecutive quarter, by 0.5%, although this was a much smaller fall when compared with Quarter 1 (Jan to Mar) 2021 (negative 12.5%) and Quarter 2 2021 (negative 17.1%) as it continues to be impacted following supply side challenges predominantly caused by the global microchip shortage disrupting car production.

This was partially offset by a 22.2% rise in mining and quarrying in part because of the reopening of sites that had previously been temporarily closed for planned maintenance.

Figure 4: The production sector in Quarter 3 (July to Sept) 2021 is now a revised 3.4% below its pre-coronavirus level (Quarter 4 2019), reflecting downwards revisions across all four sectors

Percentage change, breakdown of the production sector, Quarter 4 (Oct to Dec) 2019 to Quarter 3 (July to Sept) 2021

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Notes:
  1. Chart shows the percentage change in the production sector in Quarter 3 (July to Sept) 2021 compared with Quarter 4 (Oct to Dec) 2019.
Download the data

.xlsx

Construction

Construction output fell by a revised 1.0% in Quarter 3 2021, following four consecutive quarterly increases. Construction output is now 2.1% below its pre-coronavirus levels. The revision is because of enhanced data from VAT returns incorporated into the estimates.

More timelier estimates for construction output continue to report that the industry continues facing price rises in raw materials because of supply chain issues, which are an important reason for the decline in output in recent months.

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4. Expenditure

There were quarterly increases in private consumption in Quarter 3 (July to Sept) 2021, while there was a fall in the consumption of government goods and services. There was also a fall in underlying inventories, likely reflecting some of the recent supply chain challenges. Figure 5 presents the main expenditure components relative to their pre-coronavirus levels following revisions to estimates.

Figure 5: Private consumption is now a revised 2% below its pre-coronavirus level (Quarter 4 2019)

Percentage change, breakdown of the main expenditure components, Quarter 4 (Oct to Dec) 2019 to Quarter 3 (July to Sept) 2021

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Notes:
  1. Chart shows the percentage change in expenditure components in Quarter 3 (July to Sept) 2021 compared with Quarter 4 (Oct to Dec) 2019.

  2. The chart for presentation purposes excludes data under gross capital formation: changes in inventories; and acquisitions less disposable of assets.

  3. Private consumption comprises of households and non-profit institution serving households.

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.xlsx

Private consumption

Household consumption increased by 2.7% in Quarter 3 2021, revised from a first estimate of 2.0%. This reflects the easing of coronavirus (COVID-19) restrictions, with household consumption now 2.1% lower than its pre-coronavirus level in Quarter 4 (Oct to Dec) 2019 (previously 4.4% below) (Figure 6).

There were increases in spending on restaurants and hotels, and transport in Quarter 3 2021, following the reopening of the economy. This was partly offset by a fall in spending on household goods, clothing and footwear, and food and drink. The fall in food and drink may be because of the strong rise in spending on restaurants and hotels.

Figure 6: As a result of upward revisions in spending on restaurants, household consumption in Quarter 3 (2021) is now a revised 2.1% below its pre-coronavirus level (Quarter 4 2019)

Percentage change, breakdown of household consumption, Quarter 4 (Oct to Dec) 2019 to Quarter 3 (July to Sept) 2021

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Notes:
  1. Chart shows the percentage change in the breakdown of household consumption in Quarter 3 (July to Sept) 2021 compared with Quarter 4 (Oct to Dec) 2019.
Download the data

.xlsx

Across 2020 and 2021, non-profit institutions serving households (NPISH) volume expenditure has seen notable revisions as forecasts of output have been improved to take on auxillary data.

Consumption of government goods and services

Government consumption fell by 0.5% in Quarter 3 2021, revised from the first estimate of a rise of 0.9%. The consumption of health services fell by 1.6% in Quarter 3 2021, revised down from a first estimate of a rise of 3.4%. Revisions were driven by updated data in General Practitioner (GP) services and outpatient follow-up appointments across 2020 and 2021. In addition, the latest quarter revision was driven by the removal of a balancing adjustment put in place to align the expenditure and output measures of gross domestic product (GDP).

While the NHS Test and Trace and COVID-19 vaccination programme has contributed to health output, in Quarter 3 2021, there was a reduction in Test and Trace, and vaccination activity, driven by a fall in vaccination activity between Quarter 2 and Quarter 3. In England, vaccinations fell from 35.4 million in Quarter 2 to 14.1 million in Quarter 3. Although booster vaccinations are included in the Quarter 3 data, the campaign did not begin until the week commencing 20 September, with fewer than 900,000 booster vaccinations administered in September 2021.

There was some growth in non-coronavirus-19 health activity in Quarter 3 2021, with GP appointments. Since Quarter 2 2020, the Office for National Statistics (ONS) has used data from the Appointments in General Practice bulletin, published by NHS Digital, to inform our estimates of primary care services. These data incorporate the full range of services offered by GP practices in England. Excluded from these numbers are any activity relating to GP surgery-based COVID-19 vaccinations; these are captured in the COVID-19 vaccination programme output estimates.

Elsewhere, the consumption of education services increased by 0.1% in Quarter 3 2021, unchanged from the first estimate.

Gross capital formation

Gross fixed capital formation fell by 0.9% in Quarter 3 2021, revised down from the first estimate increase of 0.8%. This reflects a large fall of 44.8% in capital spending on transport and equipment, reflecting lower investment by the air transport industry compared with Quarter 2 2021. There were also falls in investment by the rental and leasing industries, with the semi-conductor shortage continuing to impact.

Business investment fell by 2.5% in Quarter 3 2021. Figure 7 shows the revisions to the quarterly path of business investment, which is now estimated to be 11.7% below its pre-coronavirus levels.

The underlying change in inventories saw a fall of £2.3 billion in Quarter 3 2021. This was driven by falls in inventories for other industries (including motor trades and construction), with reported falls in the stock of new cars because of the semi-conductor shortage and new cars availability.

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 fell to a deficit of negative 1.9% of GDP in Quarter 3 2021, revised from a first estimate of negative 1.2%.

In volume terms, total exports fell by a revised 3.5% in Quarter 3 2021, driven by downward revisions to goods and services. This included updated data from the International Trade in Services Survey (ITIS), in particular other business services, telecommunications, and computer and information services.

There was a fall in goods exports of 8.8% in Quarter 3 2021, particularly because of falls in machinery and transport equipment, unspecified goods, and material manufactures. The rise in service exports of 2.7% was driven by financial services, as well as other business services where GDP balancing adjustments have been applied.

Total imports rose by a revised 1.1% in Quarter 3 2021, driven by increases in fuels and unspecified goods and chemicals. Services imports fell by 2.4% in Quarter 3, because of falls in intellectual property. However, imports of air transport services and travel services increased, reflecting summer holidays and some easing in international travel restrictions.

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5. Income

Nominal gross domestic product (GDP) rose by 1.6% in Quarter 3 (July to Sept) 2021. This rise was driven by increases in taxes less subsidies and compensation of employees.

Tax receipts increased by 0.7%, driven by updated data from Value Added Tax (VAT) revenues, and national non-domestic rates (NNDR). Subsidies payments fell by 35.8% in Quarter 3, reflecting the lead up to the ending of the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS).

Compensation of employees rose by 1.6% in Quarter 3 2021. This was driven by a revised 1.6% rise in wages and salaries, which may reflect labour shortages created by record high job-to-job moves, and signs of a labour market mismatch (with record levels of vacancy numbers) raising demand for workers (thus raising wages and salaries).

There was a revised 1.4% rise in employers’ social contributions primarily driven by updated actual pension contributions data and an increase in voluntary contributions because of upward revisions in data related to the NHS pension scheme.

Gross operating surplus (GOS) of corporations saw a fall of 3.3% in Quarter 3 2021. GOS of private non-financial corporations fell by 3.7%, however, the fall in GOS of private non-financial corporations mainly reflects the alignment adjustment that is applied to this component for the purpose of balancing the income estimate of GDP for this quarter (Table 3). Excluding the alignment adjustment, GOS of private non-financial corporations increased by 0.2% in Quarter 3.

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6. Revisions to gross domestic product (GDP)

In line with the National Accounts Revisions Policy, the dataset is open to revision back to Quarter 1 (Jan to Mar) 2020 as part of this publication.

This release includes the processing and GDP balancing of a number of annual benchmark data for 2020, including the annual International Trade in Services Survey.

We have also incorporated Value Added Tax (VAT) turnover data up to Quarter 2 (Apr to June) 2021 to estimate the output of small businesses for some industries in the output approach to GDP. VAT turnover has only been used to estimate growth rates, with the overall level of output still derived from the Annual Business Survey and other annual benchmark sources.

In addition to the annual benchmarks and integration of VAT turnover, there are also revisions in this release because of the replacement of forecasts with actual survey or external source data and new seasonal adjustment factors.

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7. Quarterly sector accounts

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

In the non-financial account, the UK’s borrowing position with the rest of the world was negative 4.3% as a percentage of gross domestic product (GDP) in Quarter 3 (July to Sept) 2021, increasing from negative 2.4% of GDP in Quarter 2 (Apr to June) 2021 (Figure 9). This was driven by a widening in the UK’s trade deficit of £7.9 billion, as the trade in goods balance went from a deficit of £34.2 billion to a deficit of £46.1 billion in Quarter 3 2021.

Households saw a decrease in their net lending position to 2.3% as a percentage of GDP in Quarter 3 2021, down from 4.1% of GDP in the previous quarter. This was driven by an increase in household spending of £11.3 billion, a 3.3% increase from Quarter 2 2021. This followed a 9.4% rise in spending in Quarter 2 2021. The decrease was partially offset by a rise in wages and salaries of £3.9 billion. This was driven by an increase in private sector employment.

General government has decreased its net borrowing position to negative 7.5% as a percentage of GDP in Quarter 3 2021, from negative 9.1% of GDP in Quarter 2 2021. Within this, central government saw a fall in subsidies paid of £7.3 billion. This was partially offset by a rise in central government final consumption expenditure of £1.6 billion, with increased spending on public admin and defence.

Non-financial and financial corporations both decreased their net lending positions to 0.6% of GDP in Quarter 3 2021. Non-financial corporations’ lending decreased from 2.2% of GDP in Quarter 2 2021. Within non-financial corporations, private non-financial corporations (PNFCs) decreased their net property income by £4.7 billion, driven by increased distributed income of corporations paid of £6.6 billion. This was partially offset by increased net reinvested earnings on foreign direct investment of £4.7 billion.

Financial corporations’ net lending decreased from 0.8% of GDP in the previous quarter. This was driven by a rise in gross capital formation of £1.8 billion, itself driven by increased acquisitions less disposals of valuables of £2.1 billion.

The household saving ratio decreased to 8.6% in the latest quarter from a revised 10.7% in Quarter 2 2021 (Figure 10). Households’ gross disposable income grew by 1.1% on the previous quarter but households’ final consumption expenditure rose by 3.3% from the previous quarter. Households’ final consumption expenditure growth increased as spending on restaurants and hotels, transport, and recreation and culture increased as the final stage of COVID restrictions was lifted in England on 19 July.

Real household disposable income rose by 0.5% this quarter; nominal households’ gross disposable income grew by 1.1% but this was partially offset by household inflation of 0.6%.

Financial account net lending and borrowing (not seasonally adjusted)

Households decreased their net lending position by £14.9 billion on the quarter to £22.3 billion. This was driven by a fall in deposits with UK monetary financial institutions of £21.5 billion, as household expenditure on some discretionary spending increased. This was partially offset by a £13.3 billion fall in loans secured on dwellings.

General government decreased their net borrowing position by £19.8 billion to £46.5 billion in Quarter 3 2021, with central government decreasing their net borrowing position by £28.7 billion to £46.4 billion in Quarter 3 2021. This was driven by a decrease in the issuance of short-term and long-term debt securities of £39.4 billion. Central government also increased their deposits by £16.6 billion. However, these increases were partially offset by an increase in other accounts payable of £22.2 billion.

Non-financial corporations increased their net lending position by £5.7 billion to £25.2 billion in Quarter 3 2021, following a net lending position of £19.6 billion in the previous quarter. Private non-financial corporations (PNFCs), a subsector of non-financial corporations, saw an increase in their net lending position to £25.1 billion in Quarter 3 2021. PNFCs increased the holdings of shares and other equity issued by the rest of the world by £34.4 billion and increased their other accounts receivable by £23.5 billion. This was partially offset by a £31.3 billion decrease in deposits with UK monetary financial institutions.

Financial corporations switched to net borrowing of £11.8 billion in Quarter 3 2021 following net lending of £13.5 billion in Quarter 2 2021. This was driven by a decrease in their holdings of shares and other equity issued by the rest of the world of £45.0 billion. This was partially offset by an £18.5 billion increase in net financial derivatives and employee stock options.

Quarterly sector accounts 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; two grants intended to help businesses with a fall in sales or increased costs as a result of coronavirus (COVID-19)

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

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8. Gross domestic product (GDP) quarterly national accounts data

GDP data tables
Dataset | Released 22 December 2021
Annual and quarterly data for UK gross domestic product (GDP) estimates, in chained volume measures and current market prices.

GDP in chained volume measures – real-time database (ABMI)
Dataset | Released 22 December 2021
Quarterly levels for UK gross domestic product (GDP) at current market prices.

GDP at current prices – real-time database (YBHA)
Dataset | Released 22 December 2021
Quarterly levels for UK gross domestic product (GDP) at current market prices.

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9. Glossary

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.

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

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10. Measuring the data

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 focusing solely on growth in gross value added (GVA) and output as a proxy for GDP, there is a difference in 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 December 2021, estimates of Monthly GDP were published for October 2021. The Index of Services, Index of Production and Construction output in Great Britain publications covering October 2021 are also available.

This release sees revisions from Quarter 1 2020 to Quarter 3 2021. 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 3 (July to Sept) 2021 is provided in the dataset.

Services output overall in September 2021 is now 0.2 percentage points above its pre-coronavirus (COVID-19) pandemic level (February 2020). This is because of updated data for professional, scientific and technical activities and downward revisions to February 2020 from human health and social work activities. All other major sectors remain below their pre-coronavirus level (February 2020).

A full breakdown of the monthly data consistent with this quarterly release will be available in the next monthly GDP release (on 14 January 2022).

Pre-coronavirus comparisons of quarterly GDP

We previously referred to the challenges of measuring GDP during the pandemic and the different levels of uncertainty surrounding each measurement approach.

With revisions to 2020 and 2021 components, the three measures we use to estimate GDP growth (output, expenditure and income) are now showing a closer alignment for growth across the last seven quarters (Table 7). As a result, this has narrowed the difference between monthly and quarterly GDP measurements relative to the Quarter 4 (Oct to Dec) 2019 pre-coronavirus level.

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11. Strengths and limitations

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 3 (July to Sept) 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.

System of National Accounts consultations

As part of an update to the System of National Accounts, the United Nations (UN) are in the process of consulting on several areas being considered for improvement. Previous and live consultations can be found on the UN Statistics Division website. If you would like to discuss any of these consultations with the Office for National Statistics (ONS), please contact us at sna.consultations@ons.gov.uk. Bodies outside the UK National Statistical System are also free to respond to the consultations themselves.

Economic statistics governance after EU exit

Following the UK’s exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK’s statistical system.

At the centre of this new governance framework will be the new National Statistician’s Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world-leading. The advice NSCASE provides to the National Statistician will span the full range of domains in economic statistics, including the national accounts, fiscal statistics, prices, trade and the balance of payments, and labour market statistics.

Further information about NSCASE is available.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Niamh McAuley
gdp@ons.gov.uk
Ffôn: +44 1633 455284