Consumer trends, UK: April to June 2019

Household final consumption expenditure (HHFCE) for the UK, as a measure of economic growth. Includes all spending on goods and services by members of UK households.

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26 November 2019

ONS has identified a processing error which affects the annual chained volume measure (CVM) and implied deflator for a small number of household final consumption expenditure (HHFCE) components. The error affects figures for 2017, 2018 and 2019 and has an impact on top level HHFCE, total gross domestic product (GDP) and Real Household Disposable Income (RHDI). At component level, the biggest impact is on the UK tourist and foreign tourist expenditure HHFCE categories.

Figures will be corrected when the relevant periods are next open for revision. For 2018 and 2019, this will be in the 2019 Q3 editions of Consumer Trends, Quarterly National Accounts and Quarterly Sector Accounts, published on 20 December 2019. For 2017 it will be in the 2020 Q2 editions, published in September 2020.

Revisions in the 2019 Q3 publications if all else was equal:

The impact on 2018 annual CVM growth at top level (national concept) HHFCE is -0.13pp. The impact on 2018 GDP CVM growth is -0.03pp. Quarterly impacts on top level HHFCE are shown below, with the impact on quarterly GDP in brackets:

2018Q1 = -0.12pp (-0.02pp)
2018Q2 = -0.01pp (0.00pp)
2018Q3 = 0.00pp (0.00pp)
2018Q4 = +0.02pp (0.00pp)
2019Q1 = 0.00pp (0.00pp)
2019Q2 = -0.01pp (0.00pp)

Within Quarterly Sector Accounts, RHDI would see revisions range from -0.2pp in 2018Q1 to +0.2pp in 2018Q3 and 2019Q2.

Please note that for 2019 Q3 we are open to other data revisions back to 2018 Q1 so these are not likely to be the final revisions seen due to the other data revisions.

Revisions in the 2020 Q2 publications if all else was equal:

In addition to the 2018 revisions noted above, there will be a further round of revisions when we open 2017 data for revisions in the 2020 Q2 Consumer Trends and Quarterly National Accounts publications.

The impact on 2017 annual CVM growth at top level (national concept) household final consumption expenditure is -0.15pp. The impact on GDP CVM growth is -0.05pp. Quarterly impacts on top level HHFCE are shown below, with the impact on quarterly GDP in brackets:

2017Q1 = -0.02pp (0.00pp)
2017Q2 = -0.06pp (-0.01pp)
2017Q3 = -0.05pp (-0.01pp)
2017Q4 = +0.04pp (+0.01pp)

Comparing 2020 Q2 publications with 2019 Q3 publications, the revision to 2018 annual CVM growth at top level (national concept) HHFCE is +0.15pp. This equates to a revision of +0.03pp to annual CVM growth in GDP. Quarterly revisions then only affect top level HHFCE at +0.15pp in 2018Q1. The equivalent 2018 Q1 impact on GDP is +0.03pp.

Within Quarterly Sector Accounts, RHDI would see revisions range from -0.1pp in five of the affected quarters to +0.2pp in 2018Q3 and 2019Q2.

In the Quarter 2 2020 publications, the revisions to total HHFCE, GDP and RHDI will be made in line with the revisions policy for Blue Book 2020. This will include any methodological improvements and new supply-use balancing for these years. This will mean that these are not likely to be the final revisions seen due to the other changes being made at that time.

We apologise for any inconvenience caused.

The components affected are:

04.1.2* ‘Other actual rentals’ ADOP, UWHJ, CSM2, CSM3
09.2.2* ‘Musical instruments and major durables for indoor recreation’ ADQN, XYJT, AWOA, AWRS
11.1.2* ‘Canteens’ ADYF, ZAYC, AWOP, AWSH
0 ‘Household final consumption expenditure: domestic concept’ ABQJ, ZAKW, UTJA, UTJN
TOURIM ‘UK tourist expenditure abroad’ ABTC, ABTD, GDPE, GDPF
TOUREX ‘Foreign tourist expenditure’ CCHX, CCV0, GDPB, GDPD
Net tourist expenditure ABTG, ABTH Household final consumption expenditure: national concept ABPF, ABJR, ABQU, ABJS

  • these components feed into higher- level COICOP series which have not all been listed.
This is an accredited national statistic.

Cyswllt:
Email Vera Ruddock

Dyddiad y datganiad:
30 September 2019

Cyhoeddiad nesaf:
20 December 2019

1. Main points

  • In Quarter 2 (April to June) 2019, household spending (adjusted for inflation) grew by 0.4% compared with Quarter 1 (Jan to Mar) 2019.

  • The largest contribution to growth was in housing, which increased by 0.9% compared with Quarter 1 2019.

  • Household spending grew by 1.1% in Quarter 2 2019, when compared with Quarter 2 2018.

  • Current price spending increased by 0.7% in Quarter 2 2019 compared with Quarter 1 2019.

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2. Things you need to know about this release

The quarterly Consumer trends data are typically published around 90 days after the end of the quarter.

Unless otherwise stated all figures are chained volume measure, seasonally adjusted.

The data are consistent with Blue Book 2019.

Household final consumption expenditure (HHFCE) includes spending on goods and services except for: buying or extending a house, investment in valuables (for example, paintings and antiques) or purchasing second-hand goods. Explanations for these exceptions and the related concepts are available in Consumer trends guidance and methodology.

Household expenditure is used in the national accounts to measure the contribution of households to economic growth and accounts for about 60% of the expenditure measure of gross domestic product (GDP). There are two measures:

  • current prices – also known as nominal, cash or value series are expressed in terms of the prices of the time period being estimated

  • chained volume measure – this measure removes the effects of inflation

The estimate of HHFCE where net tourism expenditure is included is called the UK national estimate. When net tourism is excluded, this produces the aggregate total UK domestic expenditure. Lower-level analyses in this bulletin are based on the domestic concept. This is discussed in greater detail in Definitions and conventions for UK HHFCE (Word, 58KB).

Time series data for Consumer trends are also available.

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3. Household spending (adjusted for inflation) grew by 0.4% in Quarter 2 2019

In Quarter 2 (April to June) 2019, the chained volume measure of household spending increased by 0.4%. The current price value of household spending increased by 0.7% compared with Quarter 1 (Jan to Mar) 2019. Figure 1 shows the levels of current price and volume spending from Quarter 1 1997 onwards.

In Quarter 2 2019, the value of household spending in current prices increased by 2.5% on the same quarter in 2018. Over the same period the volume measure of household spending increased by 1.1%.

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4. What are the main contributors to domestic top-level growth?

Domestic growth in consumer spending in Quarter 2 (April to June) 2019 was 0.3%. Figure 2 shows the main contribution to this growth was housing, which contributed positive 0.25%. The largest negative contribution was restaurants and hotels, which contributed negative 0.07% to overall growth.

The positive 0.25% contribution from housing was caused by its positive 0.9% quarter-on-quarter growth. Within that category, the growth was driven by mains gas and liquefied petroleum gas, which grew by 16.9%, contributing 0.17% to total domestic expenditure growth. Figure 3 shows the breakdown of contributions to the housing category quarter-on-quarter growth.

At the most detailed level we record, Table 1 shows the areas that displayed the highest growth in the latest quarter.

Table 2 shows the areas that displayed the largest decline in Quarter 2 2019. While at the three-digit level, restaurants and hotels showed the largest negative contribution to the overall growth, looking at the lowest possible level, life insurance was the main negative contribution.

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5. Household final consumption expenditure revisions and changes in Quarter 2 2019

In common with all components of UK gross domestic product (GDP), household final consumption expenditure (HHFCE) estimates are subject to the revisions policy of the UK National Accounts. This allows revisions to estimates to be made at particular times of the year.

In Quarter 2 (Apr to June) 2019, the revisions to total household final consumption expenditure have been made in line with the revisions policy for Blue Book 2019. Revisions between the previous edition of Consumer trends (Quarter 1 (Jan to Mar) 2019) and the latest HHFCE estimates are summarised in Table 3. Revisions to household final expenditure national growth (chained volume measure, seasonally adjusted) can be found in the GDP data tables (Table AF).

The revisions reflect methodological changes in the compilation of estimates, updated data from suppliers, as well as adjustments to HHFCE as a result of the GDP balancing process. An article showing indicative impacts of Blue Book 2019 changes on current price and chained volume measure estimates of GDP was published on 27 June 2019.

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7. Quality and methodology

Consumer trends guidance and the Quality and Methodology Information report for Consumer trends offer further details regarding this publication.

The Quality and Methodology Information report contains important information on:

  • the strengths and limitations of the data and how it compares with related data
  • uses and users of the data
  • how the output was created
  • the quality of the output including the accuracy of the data

We have published a Quality Assurance of Administrative Data report. This details the findings of our investigation into the quality of the data sources, which are used in HHFCE.

Full information on the Classification of Individual Consumption by Purpose (COICOP) classification system can be found on the United Nations Statistics Division website.

Quality of the estimates

Household expenditure volume series are chain-linked annually. Estimates in this Consumer trends bulletin are now based on 2016 price structures; that is, the chained volume measure estimate in 2016 equals the current price value of expenditure in 2016.

Growth in each year up to and including 2016 is calculated at average prices of the previous year. Growth from 2016 onwards is calculated at average prices of 2016. Volume series are only additive for the most recent periods; that is, annual data for 2016 onwards and quarterly data for Quarter 2 (April to June) 2018 onwards.

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” but in this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques or the incorporation of new information that allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable “errors” such as human or system failures and such mistakes are made clear when they do occur.

Coherence

Household final consumption expenditure estimates published in Consumer trends are a component of the gross domestic product (GDP) expenditure approach. The GDP estimates contain data from three different approaches (output, expenditure and income approach). In the UK, the estimates of the three approaches are balanced to produce the best estimate of GDP.

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