Consumer trends, UK: July to September 2019

• In Quarter 3 (July to Sept) 2019, household spending (adjusted for inflation) grew by 0.3% compared with Quarter 2 (Apr to June) 2019.
• The largest contribution to growth was from transport, which increased by 1.2% compared with Quarter 2 2019.
• Household spending grew by 1.1% in Quarter 3 2019, when compared with Quarter 3 2018.
• Current price spending increased by 0.7% in Quarter 3 2019 compared with Quarter 2 2019.

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.

In Quarter 3 (July to Sept) 2019, the chained volume measure of household spending increased by 0.3%. The current price value of household spending increased by 0.7% compared with Quarter 2 (Apr to June) 2019. Figure 1 shows the levels of current price and volume spending from Quarter 1 (Jan to Mar) 1997 onwards.

In Quarter 3 2019, the value of household spending in current prices increased by 2.4% on the same quarter in 2018. Over the same period the volume measure of household spending increased by 1.1%.

Domestic growth in consumer spending in Quarter 3 (July to Sept) 2019 was 0.6%. Figure 2 shows the main contributions to this growth were from transport and miscellaneous goods and services, which contributed positive 0.15% and 0.14% respectively. The largest negative contribution was from housing, water, gas, electricity and other fuels, which contributed negative 0.04% to overall growth.

The positive 0.15% contribution from transport was due to its positive 1.2% quarter-on-quarter growth. Within that category, the growth was driven by 2.9% growth in transport services which includes expenditure on passenger transport by railway, by road, air, water and other transport.

The positive 0.14% contribution from miscellaneous goods and services was due to its positive 1.1% quarter-on-quarter growth. Within that category, growth was driven by two subcategories: financial services and insurance, which grew by positive 1.2% and 3.2% respectively. Both subcategories contributed positive 0.06% to total domestic expenditure growth.

Figure 3 shows the breakdown of contributions to the miscellaneous goods and services subcategory’s 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. While at the three-digit level, transport and miscellaneous goods and services showed the largest positive contribution to the overall domestic growth, looking at the lowest possible level, restaurants and cafes were the main positive contribution, closely followed by life insurance.

Table 2 shows that the area that displayed the largest decline in Quarter 3 (July to Sept) 2019 was mains gas and liquefied petroleum gas. Expenditure in Quarter 3 2019 was similar to Quarter 3 in previous years. However, expenditure in Quarter 2 (Apr to June) 2019 was higher than usual coinciding with a period of unseasonably cold weather. The greater than usual fall into Quarter 3 is a result of a return to more normal spending patterns.

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 3 (July to Sept) 2019, the revisions to total household final consumption expenditure have been made from Quarter 1 (Jan to Mar) 2018.

Revisions between the previous edition of consumer trends (Quarter 2 (Apr to June) 2019) and the latest HHFCE estimates are summarised in Table 3. The revisions reflect updated data from suppliers, in 2018 mainly driven by positive revisions for transport and recreation and culture and negative revisions for restaurants and hotels.

This release takes on the updated chained volume measure and implied deflator figures mentioned in the correction notice published on 26 November 2019.

Consumer trends guidance offers fuller details regarding this publication.

We have published a Quality and methodology information report for this statistical bulletin and details on changes to estimates and methodology in Blue Book 2018.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Consumer trends QMI.” Quality and Methodology Information report.

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 (Apr 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.