GDP quarterly national accounts, UK: July to September 2023

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.

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Cyswllt:
Email Niamh McAuley

Dyddiad y datganiad:
22 December 2023

Cyhoeddiad nesaf:
15 February 2024

1. Main points

  • UK gross domestic product (GDP) is estimated to have fallen by 0.1% in Quarter 3 (July to Sept) 2023, revised down from a first estimate of no growth.

  • UK GDP is now estimated to have shown no growth in Quarter 2 (Apr to June) 2023, revised down from a previously estimated increase of 0.2%, while growth in Quarter 1 (Jan to Mar) 2023 and all quarters of 2022 is unrevised.

  • Looking at the quarters open to revision, real GDP growth is unrevised in five of the seven quarters compared with the first quarterly estimate; however, it is important to note that the typical absolute average revision between the initial quarterly GDP estimate and the estimate three years later is 0.2 percentage points, as there is potential for revision to GDP when the annual supply and use balance occurs as more comprehensive annual data sources are available at a detailed industry and product level; all the GDP growth vintages for these quarters are shown in Table 4. 

  • In output terms, there was a 0.2% fall in the services sector in the latest quarter, which offset a 0.4% increase in construction output and a 0.1% increase in the production sector.

  • The household saving ratio is estimated at 10.1% in the latest quarter, up from 9.5% in Quarter 2 2023 because of an increase in income outweighing a slight increase in expenditure.  

  • Real households' disposable income (RHDI) is estimated to have grown by 0.4% following growth of 2.3% in Quarter 2 2023.

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2. Headline GDP figures

UK gross domestic product (GDP) is estimated to have fallen by 0.1% in Quarter 3 (July to Sept) 2023, revised down from a first estimate of no growth. This now follows an estimate of no growth in the previous quarter (previously 0.2%). Figure 1 shows though, there have been no revisions to headline GDP from Quarter 1 (Jan to Mar) 2022 to Quarter 1 2023.

Revisions primarily reflect the trade-off between the timeliness and accuracy of estimates of GDP. In line with the National Accounts Revision Policy, this release contains revisions to data from Quarter 1 2022. This release includes revisions to 2022 and 2023 as a result of updated and revised source data, including new Value Added Tax (VAT) turnover data for Quarter 2 (Apr to June) 2023. Based on these new data we have also reviewed the balancing of the three approaches to measuring GDP from 2022 onwards.

While the quarterly path of real GDP at an aggregate level is unrevised across all of 2022 and Quarter 1 2023, there have been some revisions to individual components for GDP. For more information, see Section 6: Revisions to GDP. An indicative monthly real GDP path consistent with these quarterly figures can be found in the associated dataset.

Early estimates of GDP are subject to revision (positive or negative); for more information please refer to our Communicating the UK economic cycle methodology and GDP revisions in Blue Book: 2023 article.

UK GDP is estimated to have increased by 4.3% in 2022, unrevised from the first estimate. As explained in our previous article, Impact of Blue Book 2023 changes on gross domestic product, data up to 2021 have been reconciled through the supply and use (SUTs) framework to produce one coherent estimate of GDP. Estimates of real GDP in 2022 have not yet been fully reconciled in a SUTs framework so this estimate of real GDP growth reflects the average of the output, expenditure and income measures. There can be differences in the three approaches, reflecting data uncertainty at this stage. Statistical discrepancies published in our GDP data tables show how far apart the measures are at this stage in the production cycle (Figure 2).

The three approaches to measuring GDP are currently estimating 2022 annual growth in a range of 3.1% to 5.3%, which reflects that there is some uncertainty around the underlying components for the three measures of GDP. The differences in these approaches may be for various reasons, which are now discussed.

In the output approach, we do not have estimates for intermediate consumption (value of goods and services purchased to be used up in the production of goods and services), as such, we use turnover and output as a proxy for changes in gross value added. Therefore we assume that the intermediate consumption ratio by industry, calculated in 2021, holds constant into 2022 and onwards, in other words, input costs as a proportion of turnover or output remain fixed.

In the expenditure approach, there may be added uncertainty as we have lower response rates for areas such as the Living Costs and Foods Survey, which underpin our estimates of household consumption. As part of this release we also have not taken on our 2022 annual benchmark data for the International Trade in Services (ITIS) Survey, which forms our estimates of trade in services, as we have been developing and improving methodology for the sample and require additional time to quality assure the data. Quarterly ITIS data for 2022 are included in the dataset.

In the income approach, we do not have up-to-date quarterly information on the gross trading profits of businesses as these data are collected from HM Revenue and Customs (HMRC) and are available with a lag of approximately two years. We are therefore relying on contextual data from other sources to inform these quarterly estimates. It is also important to note that there is more uncertainty around the compensation of employees figures in this publication because of lower response rates in the Labour Force Survey. We have used additional information from Pay As You Earn Real Time Information to help inform the estimates.

Estimates for 2022 will next be open for revision as part of our June 2024 Quarterly national accounts publication, whereby these data will be confronted through the SUTs framework for the first time, and as a result, there will be one single estimate of GDP.

Nominal GDP is estimated to have increased by 1.4% in Quarter 3 2023, unrevised from the first estimate. This captures price and volume changes in how much GDP has been produced. Compared with the same quarter a year ago, nominal GDP is estimated to have increased by 8.7%.

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. It is important to note that the GDP deflator covers the whole of the domestic economy, not just consumer spending, and also reflects the change in the relative price of exports to imports. For more information on the implied GDP deflator, see our Measuring price changes of the UK national accounts: February 2023 article.

The implied price of GDP rose by a revised 1.5% in Quarter 3 2023 (previously 1.4%), where the quarterly increase is primarily driven by higher price pressures for gross capital formation as well as an easing in the implied price of imports, which contributes positively to the GDP implied deflator.

Compared with the same quarter a year ago, there was an 8.4% increase in the GDP implied deflator, revised up from a first estimate of 7.9% (Figure 3).

Revisions to the implied deflator, particularly from Quarter 4 (Oct to Dec) onwards, are driven by upward revisions in the implied price for gross capital formation, household consumption, exports and imports.

More about economy, business and jobs

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3. Output

In Quarter 3 (July to Sept) 2023, output is estimated to have fallen by 0.1% (revised down from the first estimate of no growth). This follows no growth in Quarter 2 (Apr to June) 2023, revised down from a first estimate increase of 0.2%.

The services sector is now estimated to have fallen by 0.2% in the third quarter of 2023, revised down from a first estimate fall of 0.1%. The production sector is now estimated to have increased by 0.1%, revised up from a first estimate of no growth. Elsewhere, construction output is revised up to a 0.4% increase (previously 0.1%).

In Quarter 2 2023, the services sector is now estimated to have fallen by 0.1%, revised down from a first estimate of no growth. Elsewhere, the production sector is now estimated to have increased by 0.9% (previously 1.2%) and construction by 0.4% (previously 0.3%).

These revisions to components are discussed in more detail.

Services

Services output is now estimated to have fallen by 0.2% in the latest quarter, revised down from a first estimate fall of 0.1%. Figure 4 shows that there were falls in 8 out of 14 subsectors, which is largely unchanged from the first estimate, however, there have been revisions to the drivers of growth across the quarter.

Overall, consumer-facing services fell by 1.0%, revised down from a first estimate fall of 0.7%. This is the largest decline in consumer-facing services since Quarter 1 (Jan to Mar) 2021.

The largest contributions to the fall in total services were from a decline of 1.4% in the information and communication subsector. Within this, there were falls in five out of six industries, with the largest in telecommunications.

The largest positive contribution to growth was from the education sector, which increased by 0.7% with increased school attendance across the quarter. The next largest positive contributions to growth were from public administration and defence, which increased by 0.7%; and arts, entertainment and recreation, which increased by 1.0%.

Across 2022 and 2023, the services sector sees revisions to growth mainly driven by the transport, storage and communications; and business services and finance subsectors (Figure 5). Overall the revisions to services mainly reflect the following discussed industries.

  • Information and communication: this revision is driven by changes to telecommunications and computer programming; the revision to telecommunications reflects updated deflator data, whereas the revision to computer programming is mainly because of updated deflator data as well as seasonal adjustment, there are also revisions across the industries because of weaker Value Added Tax data (VAT) for Quarter 2 2023, which has been incorporated for the first time.

  • Transport and storage: this subsector sees revisions mostly in air transport; and postal and courier activities because of new and revised data.

  • Accommodation and food service activities: this subsector sees revisions in both industries as a result of revised survey data and new VAT data.

  • Professional, scientific and technical activities: the upward revision in Quarter 4 (Oct to Dec) 2022 and Quarter 1 2023 are driven by new and revised survey data within the advertising and market research industry; in Quarter 3 2023, six of the eight industries in this section are revised down, with the largest contribution coming from architecture and engineering activities; technical testing and analysis, because of revised survey data since our last publication and the new VAT data for Quarter 2 2023.

Production

The production sector is now estimated to have increased by 0.1% in the latest quarter, revised up from no growth in the previous estimate. The revisions within production are discussed in more detail in this section.

Within production in the latest quarter, growth in manufacturing; mining and quarrying; and electricity, gas, steam and air conditioning supply was partially offset by a fall in water supply; sewerage, waste management and remediation activities.

Manufacturing output increased by an unrevised 0.1% with increases in 7 out of the 13 subsectors (Figure 6), with the largest positive contribution from the manufacture of transport equipment that has seen four consecutive quarters of positive growth. Anecdotal evidence from the Society of Motor Manufacturers and Traders (SMMT) reported that car manufacturing for September 2023 was up 14.9% compared with the same month last year.

Figure 6 shows the contributions to manufacturing growth are largely unchanged from the first estimate.

Across 2022 and 2023, the production sector sees revisions to growth mainly driven by manufacturing; and the electricity, gas and steam subsectors (Figure 7). Overall the revisions to production reflect:

  • revised volume data from the Department for Energy Security and Net Zero (DESNZ) for electricity, gas, steam and air conditioning supply

  • new Value Added Tax (VAT) turnover data for Quarter 2 2023

  • new and revised Monthly Business Survey data

  • seasonal adjustment models

Construction

Construction output rose by 0.4% in Quarter 3 2023, revised up from a first estimate increase of 0.1%. Revisions across the construction sector reflect new VAT data taken on for the first time for the periods Quarter 4 2022 to Quarter 2 2023, as well as revised Monthly Business Survey data.

The growth in Quarter 3 2023 is driven by an increase of 1.5% in repair and maintenance, partially offset by a 0.4% fall in new work.

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4. Expenditure

There was a fall in business investment and household spending in Quarter 3 (July to Sept) 2023, partially offset by an increase in government consumption and the volume of international trade flows. Figure 8 shows the previous and latest contributions to expenditure in Quarter 3 2023. These revisions to components are discussed in more detail.

Household consumption

There was a fall of 0.5% in real household expenditure in Quarter 3 2023, revised down from a first estimate fall of 0.4%.

Within household consumption, the largest contributions to the fall in the latest quarter were from lower spending on miscellaneous goods and services (within this there were falls in social protection; jewellery, clocks and watches), spending on restaurants and hotels, spending on food and non-alcoholic drink, and spending on furniture and household equipment. Net tourism contributed positively to growth in the latest quarter. Information on how we measure net tourism is provided in our National Accounts article: Treatment of tourism in the UK National Accounts.

Figure 9 shows there have been minor revisions to household consumption across 2022 and 2023. These revisions include updated data on transport, health, recreation and culture, and restaurants and hotels. There are also revisions to net tourism because of updated International Passenger Survey data as well as a review of seasonal adjustment. While household consumption sees revisions because of net tourism, these are offset within trade and therefore there is no impact on the gross domestic product (GDP) aggregate.

Consumption of government goods and services

Real government consumption expenditure increased by 0.8% in the latest quarter, revised up from a first estimate fall of 0.5%. The increase in government consumption in the latest quarter mainly reflects high spending on public administration and defence, and education. Within health, there was a small fall of 0.1%, which may be because of industrial action that took place throughout the quarter. Revisions to government consumption reflect updated data on public administration and defence, and health.

Gross capital formation

Gross fixed capital formation (GFCF) is estimated to have fallen by 1.6%, revised up from a first estimate fall of 2.0%.

There was a fall of 3.2% in business investment in the latest quarter (previously a 4.2% fall), with declines in investment in transport equipment, other machinery and equipment, and dwellings. The fall in business investment follows two quarters of strong growth of 1.4% in Quarter 2 (Apr to June) and 3.8% in Quarter 1 (Jan to Mar) 2023.

Figure 10 shows that there have been some revisions to the path of business investment across 2022 and 2023. This reflects revised survey data, a further review of seasonal adjustment, as well as the removal of previously applied balancing adjustments.

Excluding the alignment and balancing adjustments, revised estimates show that inventories fell by £0.6 billion in Quarter 3 2023. In current price terms, early estimates show that there was an increase of £7.7 billion in the latest quarter driven by increased stocks in the wholesale sector.

Net trade

The UK’s trade deficit for goods and services was 0.8% of nominal gross domestic product (GDP) in Quarter 3 2023, revised down from a first estimate deficit of 0.7%. However, there have been large movements in non-monetary gold over the last quarter, which can be volatile. Excluding non-monetary gold, the trade deficit was 1.0% of nominal GDP in Quarter 3 2023, revised down from a first estimate deficit of 0.8% (Figure 11).

Export volumes fell by 0.6% in the latest quarter, revised down from a first estimate increase of 0.5%. There was a 3.1% rise in services exports (previously a 2.8% increase), which partially offset a fall of 4.8% in goods exports (previously a 2.0% fall).

The revisions in services exports were driven by International Trade In Services Survey data for Quarter 2 and Quarter 3 2023, updated International Passenger Survey data, and annual Chamber of Shipping data for 2022.

The fall in goods exports was mainly driven by large movements in non-monetary gold, however, this series also appears within gross capital formation (GCF) as valuables and so the impact is GDP neutral.

Import volumes fell by 1.0% in the latest quarter, revised down from a first estimate fall of 0.8%. The decline in the latest quarter was driven by an unrevised 3.5% fall in goods imports, which more than offset a 3.5% increase in services imports (previously 4.2%).

The fall in goods imports was mainly driven by machinery and transport equipment in particular in mechanical power generators, telecoms and sound equipment, and aircraft.

The increase in services imports was driven by growth in other business services, insurance and pension services, and construction services.

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5. Income

Nominal gross domestic product (GDP) rose by 1.4% in Quarter 3 (July to Sept) 2023, unrevised from the first estimate. The quarterly rise was driven by growth in taxes less subsidies, compensation of employees, and other income.

Figure 12 shows the previous and latest contributions to nominal GDP in Quarter 3 2023. The impact of revisions on nominal gross domestic income over this period has been minimal, although there have been some larger revisions to components.

Compensation of employees increased by 1.5% in Quarter 3 2023 (previously estimated to be 1.0%), driven by a rise in wages and salaries of 1.7% and a 0.5% increase in employers' social contributions. It is important to note that there is more uncertainty around the compensation of employees figures in this publication because of lower response rates in the Labour Force Survey. We have used additional information from Pay As You Earn Real Time Information to help inform the estimates. Revisions in compensation of employees reflect updated public sector data and average weekly earnings data.

Early estimates show that taxes less subsidies increased by 5.9% in Quarter 3 2023 (previously estimated to be 7.5%). Growth in the latest quarter was driven by a large decrease in subsidies because of the lower payments as part of the Energy Price Guarantee scheme and the Energy Bill Relief Scheme. In October 2022, the Office for National Statistics (ONS) announced that these schemes had been classified as a subsidy on products from central government to energy suppliers in the non-financial corporations sector in the UK. For more information, see our Energy Price Guarantee classification review and Energy Bill Relief Scheme classification review. Data for these quarters are an initial indicative estimate, which will be revised over the coming months as firmer data become available.

Total gross operating surplus (GOS) of corporations, excluding the alignment adjustment, fell by 1.9% (Table 3), with falls in both financial corporations and non-financial corporations GOS. Within GOS of corporations, there continues to be increased uncertainty around the full impacts of the Energy Bill Relief and Energy Price Guarantee schemes, however, this has improved as reflected in the income alignment adjustments, which have now came into our normal tolerance range of plus or minus £3 billion. As a result there are revisions to total GOS. Excluding the alignment adjustment, GOS sees minimal revision across 2022 and 2023, with the largest revisions in Quarter 3 2023 both in private non-financial corporations and financial corporations GOS.

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6. Revisions to GDP

In line with the National Accounts Revisions Policy, the dataset is open to revision back to Quarter 1 (Jan to Mar) 2022 as part of this publication. The revised estimates of average real gross domestic product (GDP) compared with the first estimate are shown in Figure 1, while Table 4 shows quarter on quarter growth at different publication vintages for real GDP. Revision triangles for GDP and components are available alongside the publication.

The revisions to quarter-on-quarter growth for the components of GDP are shown in Table 5. This release includes the processing, and GDP balancing, of a number of better quality but less timely annual datasets for 2022. However for this release, annual data for 2022 from the International Trade in Services (ITIS) Survey has not been included in this dataset as we have been developing and improving methodology for the sample and require additional time to quality assure the data. These will be incorporated in our June Quarterly national accounts. Quarterly ITIS data for 2022 are included in the dataset

We have also incorporated Value Added Tax (VAT) turnover data up to Quarter 2 (Apr to June) 2023 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 such as energy data from Department for Energy Security and Net Zero, and new seasonal adjustment factors.

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7. Quarterly sector accounts

Because of technical issues relating to the Foreign Direct Investment (FDI) Survey, there is more uncertainty around the foreign direct investment estimates for Quarter 3 (July to Sept) 2023 in this publication. As such we have not included our FDI annual benchmark data for 2022 or updated quarterly survey data for 2023 quarters. Users should be cautious when interpreting Quarter 3 2023 FDI data that are part of the UK sector accounts and UK balance of payments (BoP) statistics. For further information please contact bop@ons.gov.uk

Household saving ratio

The household saving ratio is estimated at 10.1% in the latest quarter, up from 9.5% in Quarter 2 (Apr to June) 2023. This upward movement was driven by a rise in wages and salaries of £4.6 billion together with increased gross operating surplus and mixed income of £3.0 billion. Wages and salaries' biggest contributor to growth was the increases in private sector pay. This was partially offset by rising taxes on income and wealth, which increased by £3.0 billion.

The household saving ratio has revised up by 0.4 percentage points from 9.1% to 9.5% in Quarter 2 2023. This is driven mainly by a downward revision in taxes on income and wealth of £1.2 billion, and an upward revision in net social benefits other than transfers in kind of £0.9 billion. 

Real households' disposable income (seasonally adjusted)

Real households' disposable income (RHDI) is estimated to have grown by 0.4% following growth of 2.3% in Quarter 2 2023. Within RHDI, nominal gross disposable income saw growth at 1.1% driven by increased income as described in the previous section on the households saving ratio. This was offset by growth in the implied deflator of 0.7% as households experienced price increases in several spending categories, including rental and transport.

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

The UK's borrowing position with the rest of the world as a percentage of gross domestic product (GDP) is estimated to have decreased to 2.6% in Quarter 3 2023 compared with 3.7% of GDP in Quarter 2 2023.   

Recent estimates show financial corporations decreased their net lending position to 1.7% of GDP, from 2.6% of GDP in Quarter 2 2023. This was driven by a fall in net property income of £7.7 billion together with increased gross capital formation of £2.4 billion, partially offset by increase in net capital transfers of £4.5 billion. 

Non-financial corporations increased their net borrowing to 1.3% of GDP in Quarter 3 2023, from 0.9% of GDP in Quarter 2 2023. Within non-financial corporations, private non-financial corporations (PNFCs) increased their net borrowing to £9.0 billion, up from £6.1 billion in the previous quarter. This increase was driven by a decrease in gross operating surplus of £2.9 billion and an increase in gross capital formation of £2.4 billion, partially offset by an increase in net property income of £3.0 billion. 

Private non-financial corporations' (PNFCs) saw a downward revision in their net lending/borrowing position in Quarter 2 2023 of £8.3 billion. This led to a switch to net borrowing of £6.1 billion from a previous net lending position of £2.3 billion. This was driven by a downward revision in gross operating surplus of £5.9 billion and an upward revision of gross capital formation of £2.2 billion.

Households increased their net lending position to 3.0% of GDP in Quarter 3 2023 compared with an estimate of 2.8% of GDP in Quarter 2 2023. This was driven by greater increases in income than expenditure as described in the previous section on the saving ratio. 

General government decreased net borrowing to 5.2% of GDP in Quarter 3 2023, from 7.2% of GDP in Quarter 2 2023. Within general government, central government decreased net borrowing to £33.1 billion following £49.6 billion in the previous quarter. This decrease was driven by an increase in net property income of £9.1 billion, together with an increase in taxes on production and imports less subsidies of £4.3 billion, an increase in net other current transfers of £3.7 billion, and taxes on income and wealth of £3.2 billion. This was partially offset by a decrease in net capital transfer of £4.2 billion.

Financial account net lending and borrowing (not seasonally adjusted) 

Households saw an increase in their net lending as a percentage of GDP in the latest quarter, at 2.9%, from 2.8% in Quarter 2 2023. Within their financial account, households saw increases in deposits of £3.7 billion, partially offset by a decrease in equity and investment fund share units of £1.5 billion. Households have returned to positive net secured lending on dwellings to households at £1.4 billion, with the previous quarter at negative £1.8 billion.

Financial corporations are estimated to have increased their net lending as a percentage of GDP to 2.7% in the latest quarter following lending of 0.7% in Quarter 2 2023. This was driven by an increase in net short-term loans by UK monetary financial institutions of £127.1 billion together with an increase in net currency and deposits of £56.1 billion, partially offset by a fall in equity and investment fund shares and units of £102.2 billion and a fall in debt securities of £80.9 billion. 

Non-financial corporations are estimated to have switched to net borrowing as a percentage of GDP of 2.5% in the latest quarter following net lending of 1.8% in Quarter 2 2023. Within this sector, private non-financial corporations (PNFCs) switched to net borrowing as a percentage of GDP of 2.4% following net lending of 1.7% in Quarter 2 2023. This was driven by a fall in net loans of £24.1 billion together with a fall in debt securities of £7.2 billion and a fall in equity and investment fund shares and units of £6.0 billion, partially offset by a rise in net other accounts of £15.7 billion. 

General government decreased their net borrowing as a percentage of GDP to an estimated 5.7% in the latest quarter, from 9.4% in Quarter 2 2023. This decrease was driven by a fall in long-term debt securities issued by UK central government of £99.0 billion, partially offset by decreased other deposits at £39.9 billion.

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8. International comparisons

Gross Domestic Product (GDP)

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9. GDP quarterly national accounts data

GDP - data tables
Dataset | Released 22 December 2023
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 2023
Quarterly levels for UK gross domestic product (GDP), in chained volume measures at market prices.

GDP at current prices - real-time database (YBHA)
Dataset | Released 22 December 2023
Quarterly levels for UK gross domestic product (GDP) at current market prices.

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10. Glossary

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11. Measuring the data

Reaching the GDP balance

The different data content and quality of the three approaches: the output approach, the expenditure approach and the income approach, dictate 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. 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.

Quarterly GDP is a balanced measure of the three approaches, while the GDP monthly estimate focuses on gross value added (GVA) and output as a proxy for GDP. This results in data differences (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 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 our GDP data tables, have a target limit of plus or minus £3,000 million on any quarter. However, in periods where the data sources are particularly difficult to balance, larger alignment adjustments are sometimes needed, as explained in our article Recent challenges of balancing the three approaches of GDP. Our standard practice is to prefer that the alignment adjustment be out of tolerance rather than over-adjust individual GDP components to achieve a balance. This is most likely to occur in the latest quarter where the constraints are larger, where we must align to the output estimate for the change in GDP, and where the data content is at its lowest.

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 estimate are shown in Table 8. The resulting series should be considered accordingly.

GDP monthly estimate

Although this release focuses on providing the best quarterly estimate of gross domestic product (GDP), an indicative monthly path for the updated time series is provided in the dataset. A full breakdown of the monthly data consistent with this quarterly release will be available in the next monthly GDP release (on 12 January 2024).

Office for Statistics Regulation (OSR) Revisions of estimates of UK GDP review

The Office for Statistics Regulation (OSR) have completed a review of the practices around the preparation and release of information about revisions to estimates of GDP in our Impact of Blue Book 2023 article released on 1 September 2023, as announced on 6 September 2023. The outcome of this review can be viewed on the OSR website. This review covered:

  • processes and quality assurance in making revisions to GDP

  • potential improvements to early estimates of GDP enabled through enhanced access to data

  • communication of revisions to GDP, the story behind the most recent set of revisions in particular, and uncertainty in early estimates of GDP

We have already started work looking into the recommendations of this review and will set out plans more fully during January 2024.

We have published a blog today on how we communicate uncertainty in our GDP estimates.

Net trade

HM Revenue and Customs (HMRC) implemented a data collection change affecting data on goods exports from Great Britain (GB) to the EU in January 2021, and data on goods imports from the EU to GB in January 2022. For more information, see HMRC's Methodology changes to trade in goods statistics from March 2022 article.

We have applied adjustments to our estimates of goods imports from the EU for 2021 to reflect this data collection change, which brought imports and exports statistics onto a like-for-like basis in 2021, as detailed in our Trade in goods: Adjustments to 2021 EU imports estimates, by chapter dataset. The full time series for goods imports from and exports to the EU contains a discontinuity from January 2021 resulting from the move from Intrastat to customs declarations, as detailed in our Impact of trade in goods data collection changes on UK trade statistics: adjustments to 2021 EU imports estimates article. We are continuing to work with HMRC to consider possible options to account for this discontinuity. 

Separately, in 2021, the use of Staged Customs Controls (SCC) allowed customs declarations to be reported up to 175 days after the date of import for imports of non-controlled goods from the EU to GB. The UK government introduced full customs controls in January 2022, while July 2022 marked the first full month of data where delayed customs declarations submitted under SCC could not be included. Temporary arrangements still apply for imports of goods from Ireland to GB. In our Impact of trade in goods data collection changes on UK trade statistics: further update on Staged Customs Controls article published on 3 July 2023, we presented analysis on the impact of SCC on trade in goods data for imports from the EU to GB in 2022. We have previously adjusted for the impact of SCC and have published our Impact of trade in goods data collection changes on UK trade statistics: adjustments to 2022 EU imports estimates article providing a detailed breakdown of the impact of these adjustments.

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12. 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 (QMI) 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.

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14. Cite this statistical bulletin

Office for National Statistics (ONS), released 22 December 2023, ONS website, statistical bulletin, GDP quarterly national accounts, UK: July to September 2023

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Manylion cyswllt ar gyfer y Bwletin ystadegol

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