Cynnwys
- Main points
- Things you need to know about this release
- Household spending (adjusted for inflation) grew by 0.3% in Quarter 4 2017
- What are the main contributors to this growth?
- Household spending per head
- Household final consumption expenditure revisions, Quarter 4 2017
- Links to related statistics
- Upcoming and recent publications
- Quality and methodology
1. Main points
In Quarter 4 (Oct to Dec) 2017, household spending (adjusted for inflation) grew by 0.3% compared with Quarter 3 (July to Sept) 2017.
The main contribution to growth can be seen in housing, which has increased by 0.4% compared with Quarter 3 2017.
Household spending grew 1.2% in Quarter 4 2017, when compared with Quarter 4 2016.
Household spending has increased by 1.7% in 2017 when compared with 2016.
In Quarter 4 2017, current price spending increased by 0.9% compared with Quarter 3 2017.
2. Things you need to know about this release
The quarterly Consumer trends 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 2017. The article Changes to national accounts: actual rentals and imputed rentals published on 16 February 2017 gives detail on the major changes that affected household expenditure in Blue Book 2017.
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 is also available.
Nôl i'r tabl cynnwys3. Household spending (adjusted for inflation) grew by 0.3% in Quarter 4 2017
In Quarter 4 (Oct to Dec) 2017, the chained volume measure of household spending increased by 0.3%. The current price value of household spending increased by 0.9% compared with Quarter 3 (July to Sept) 2017. Figure 1 shows the levels of current price and volume spending from Quarter 1 (Jan to Mar) 1997 onwards.
In Quarter 4 2017, the value of household spending in current prices increased by 3.0% on the same quarter in 2016. When comparing the volume measure of household spending in Quarter 4 2017 with the same quarter in 2016, it increased by 1.2%.
Figure 1: Quarterly household final consumption expenditure total (£ billion), seasonally adjusted, UK
Quarter 1 (Jan to Mar) 1997 to Quarter 4 (Oct to Dec) 2017
Source: Office for National Statistics
Notes:
- In this chart Q1 refers to Quarter 1 (January to March), Q2 refers to Quarter 2 (April to June), Q3 refers to Quarter 3 (July to September) and Q4 refers to Quarter 4 (October to December).
Download this chart Figure 1: Quarterly household final consumption expenditure total (£ billion), seasonally adjusted, UK
Image .csv .xlsSince the economic downturn in 2008 to 2009 (reaching its lowest point in Quarter 2 2009), household final consumption expenditure (HHFCE) has grown by 15.2% in volume terms. In current prices, it has grown by 36.1% (£85,869 million). This shows that whilst household spending has increased during this period, the volume of goods and services purchased by households has increased at a far lesser rate, indicating the effect of price inflation.
During 2017, quarterly growth remained on trend; however, household consumption remains relatively subdued with quarter-on-year growth of 1.2% slowing for the fifth consecutive quarter to be at its lowest rate since Quarter 1 2012. Household spending has increased by 1.7% in 2017 when compared with 2016. This is the lowest rate of annual growth since 2011, when growth in household spending decreased by 1.0%.
Nôl i'r tabl cynnwys4. What are the main contributors to this growth?
As illustrated in Figure 2, the main contributors to the 0.3% growth in consumer spending in Quarter 4 (Oct to Dec) 2017 were housing and recreation and culture, which both contributed 0.1%, partially offset by education, which contributed a small amount of negative growth.
Figure 2: COICOP contribution to overall growth, domestic measure, chained volume measure, seasonally adjusted, UK
Quarter 3 (July to Sept) 2017 to Quarter 4 (Oct to Dec) 2017
Source: Office for National Statistics
Download this chart Figure 2: COICOP contribution to overall growth, domestic measure, chained volume measure, seasonally adjusted, UK
Image .csv .xlsThe 0.11% contribution from housing was due to its growth of 0.4% quarter-on-quarter. Within that category, the growth was driven mainly by electricity, which grew by 4.4% quarter-on-quarter, contributing 0.05% to total domestic expenditure growth.
Recreation and culture, and transport are the next largest contributors to overall growth, each contributing 0.09% to the overall total growth.
Figure 3: Contribution to 0.4% growth in housing, water, gas, electricity and other, chained volume measure, seasonally adjusted, UK
Quarter 3 (July to Sept) 2017 to Quarter 4 (Oct to Dec) 2017
Source: Office for National Statistics
Download this chart Figure 3: Contribution to 0.4% growth in housing, water, gas, electricity and other, chained volume measure, seasonally adjusted, UK
Image .csv .xlsAt the most detailed level we record, Table 1 shows the areas that displayed the highest growth.
Table 1: Main positive contributions to overall household final consumption expenditure growth, chained volume measure, seasonally adjusted, 4-digit COICOP, UK, Quarter 4 (Oct to Dec) 2017
COICOP | Description | Contribution to growth (%) | |||||
04.5.1 | Electricity | 0.05 | |||||
12.1.3 | Other products for personal care | 0.05 | |||||
Source: Office for National Statistics |
Download this table Table 1: Main positive contributions to overall household final consumption expenditure growth, chained volume measure, seasonally adjusted, 4-digit COICOP, UK, Quarter 4 (Oct to Dec) 2017
.xls (31.7 kB)At this level, Table 2 shows the area that displayed the largest decline in Quarter 4 2017.
Table 2: Main negative contributions to overall household final consumption expenditure growth, chained volume measure, seasonally adjusted, 4-digit COICOP, UK, Quarter 4 (Oct to Dec) 2017
COICOP | Description | Contribution to growth (%) | |||
---|---|---|---|---|---|
12.5.1 | Life insurance | -0.08 | |||
Source: Office for National Statistics |
Download this table Table 2: Main negative contributions to overall household final consumption expenditure growth, chained volume measure, seasonally adjusted, 4-digit COICOP, UK, Quarter 4 (Oct to Dec) 2017
.xls (31.7 kB)
Figure 4: Contribution to 0.4% growth in miscellaneous, chained volume measure, seasonally adjusted, UK
Quarter 4 (Oct to Dec) 2017
Source: Office for National Statistics
Download this chart Figure 4: Contribution to 0.4% growth in miscellaneous, chained volume measure, seasonally adjusted, UK
Image .csv .xlsFigure 4 shows the contribution to growth for miscellaneous goods and services. The largest contributor to this negative growth is from insurance, although this has been offset by the positive growth in financial services.
Nôl i'r tabl cynnwys5. Household spending per head
In 2017, current price spending per head grew by £589 when compared with 2016, an increase of 3.1%. Total per-head spending has now reached £19,394 in 2017, with housing and transport making the largest contributions of £5,153 and £2,528 respectively. The third-largest contribution to overall per-head spending can be seen in miscellaneous, where spending in 2017 reached £2,499.
In current price terms, seasonally adjusted, consumer spending in Quarter 4 (Oct to Dec) 2017 has now reached £4,890 per head. This is an increase of £36 (positive 0.7%) per head when compared with Quarter 3 (July to Sept) 2017. In volume terms, there has been an increase of 0.1% per head, indicating that consumers spent more because they bought more in addition to the effect of increasing prices.
Comparing spending by types of goods and services (in current price terms), households have continued to spend most on services. In 2017, spending on services grew to its highest level since the start of the series, and is now at £11,214, contributing 58.3% of total household spending. Services includes spending on essential items such as housing and transport services.
Figure 5: Household expenditure spending per head, UK, 1997 to 2017
Source: Office for National Statistics
Download this chart Figure 5: Household expenditure spending per head, UK, 1997 to 2017
Image .csv .xls6. Household final consumption expenditure revisions, Quarter 4 2017
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 4 (Oct to Dec) 2017, the revisions to total household final consumption expenditure have been made from Quarter 1 (Jan to Mar) 2017.
Revisions between the previous edition of Consumer trends (Quarter 3 (July to Sept) 2017) and the latest HHFCE estimates are summarised in Table 3. The revisions reflect updated data from suppliers, as well as adjustments to HHFCE as a result of the GDP balancing process.
Table 3: Revisions to household final consumption expenditure, seasonally adjusted, UK, Quarter 1 (Jan to Mar) 2017 to Quarter 3 (July to Sept) 2017
£ million | % | % | |||||
---|---|---|---|---|---|---|---|
Revisions to value (current prices) | Revisions to growth (current prices) | Revisions to growth (volume measure) | |||||
2017 Q1 | 485 | 0.2 | 0.3 | ||||
2017 Q2 | 643 | _ | 0.1 | ||||
2017 Q3 | 28 | -0.2 | -0.2 | ||||
Source: Office for National Statistics |
Download this table Table 3: Revisions to household final consumption expenditure, seasonally adjusted, UK, Quarter 1 (Jan to Mar) 2017 to Quarter 3 (July to Sept) 2017
.xls (32.3 kB)All growth rates in Consumer trends are rounded to one decimal place. This may cause disparity between revisions displayed in the main Consumer trends tables and the revisions table.
Nôl i'r tabl cynnwys8. Upcoming and recent publications
We published an article detailing the change being made to the estimation of actual and imputed rentals (Classification of individual consumption by purpose (COICOPs) 04.1 and 04.2) in Blue Book 2017.
Nôl i'r tabl cynnwys9. Quality and methodology
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 2017.
The Consumer trends 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
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 2015 price structures; that is, the chained volume measure estimate in 2015 equals the current price value of expenditure in 2015.
Growth in each year up to and including 2015 is calculated at average prices of the previous year. Growth from 2015 onwards is calculated at average prices of 2015. Volume series are only additive for the most recent periods; that is, annual data for 2015 onwards and quarterly data for Quarter 1 (Jan to Mar) 2016 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. However, the preliminary estimate for GDP is produced based on the GDP output approach. Historic experience shows that the output approach provides the best timely approach to measuring GDP growth. GDP growth according to the expenditure and income approaches is therefore brought into line with that recorded by output.
Nôl i'r tabl cynnwysManylion cyswllt ar gyfer y Bwletin ystadegol
Related publications
- Monthly economic commentary: March 2018
- GDP quarterly national accounts, UK: October to December 2017
- Balance of payments, UK: Quarter 4 (Oct to Dec) 2017
- Business investment in the UK: October to December 2017 revised results
- Index of Services, UK: January 2018
- Quarterly sector accounts, UK: October to December 2017