Cynnwys
- Main points
- Summary of household expenditure in Quarter 4 (Oct to Dec) 2016
- Trends in household expenditure
- Household spending by product
- Focus on prices in household expenditure
- Household spending per head
- Household final consumption expenditure revisions Quarter 4 (Oct to Dec) 2016
- User engagement seminar
- Quality and methodology
1. Main points
- In Quarter 4 (Oct to Dec) 2016, household spending (adjusted for inflation) grew by 0.7% (£2.0 billion) compared with Quarter 3 (July to Sept) 2016.
- The main contribution to growth can be seen in “Housing”, this has increased by 1.3% compared with Quarter 3 2016.
- Household spending in volume terms increased to £277.1 billion in Quarter 4 2007 before falling to £260.1 billion in Quarter 2 2009; following falls in 2010 and 2011, it increased to £294.8 billion in Quarter 4 2016, the highest volume spending since the start of the series, in each quarter since Quarter 3 2014, volume spending has exceeded the previous high in Quarter 4 2007.
- Household spending when compared with the same quarter a year ago has been showing positive growth each quarter since Quarter 4 2011; it was 2.9% higher in Quarter 4 2016, when compared with Quarter 4 2015.
- The current price value of household spending, which includes inflation, shows how much UK households spent; in Quarter 4 2016, current price spending increased by 1.4% compared with Quarter 3 2016.
- The household expenditure implied deflator increased by 0.7% in Quarter 4 2016 compared with the previous quarter.
2. Summary of household expenditure in Quarter 4 (Oct to Dec) 2016
The volume measure provides an estimate of the amount of goods and services purchased by households. In Quarter 4 (Oct to Dec) 2016, it increased by 0.7%. The current price value of household spending (inflation included) shows how much UK households spent. In Quarter 4 2016, it increased by 1.4% compared with Quarter 3 (July to Sept) 2016. Figure 1 compares the levels of current price and volume spending from Quarter 4 2010 onwards.
Figure 1: Quarterly household final consumption expenditure total (£ billion), seasonally adjusted, UK, Quarter 4 (Oct to Dec) 2010 to Quarter 4 (Oct to Dec) 2016
Source: Office for National Statistics
Download this chart Figure 1: Quarterly household final consumption expenditure total (£ billion), seasonally adjusted, UK, Quarter 4 (Oct to Dec) 2010 to Quarter 4 (Oct to Dec) 2016
Image .csv .xls3. Trends in household expenditure
Household final consumption expenditure (HHFCE) includes spending on goods and services except for buying or extending a house, investment in valuables (paintings, antiques and so on) 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 2 measures:
- current prices – which is the value of spending in a particular quarter measured in the prices at that time
- volume terms – which adjusts for price inflation and gives a better picture of whether households are purchasing more goods and services
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.
Figure 2: Annual household final consumption expenditure (£ billion), UK, 1997 to 2016
Source: Office for National Statistics
Download this chart Figure 2: Annual household final consumption expenditure (£ billion), UK, 1997 to 2016
Image .csv .xlsFrom 1997, household final consumption expenditure:
- in current prices, increased to £244.8 billion in Quarter 2 (Apr to June) 2008, falling to £235.2 billion in Quarter 2 2009, then returning to positive growth primarily in each quarter since Quarter 3 (July to Sept) 2009 to reach £306.3 billion in the latest quarter, Quarter 4 2016
- in volume terms, increased to £277.1 billion in Quarter 4 2007, falling to £260.1 billion in Quarter 2 2009; following falls in 2010 and 2011, it has now increased to £294.8 billion, the highest volume spending since the start of the series; in each quarter since Quarter 3 2014, volume spending has exceeded the previous high in Quarter 4 2007
The pre-2007 increases in household spending were a consequence of households predominantly facing higher prices and buying more goods and services. In 2008 and 2009, households spent less because they predominantly bought less, in volume terms. Since 2009, household spending has increased, but the volume of goods and services purchased has experienced far less growth.
In Quarter 4 2016, the value of household spending in current prices increased by 1.4% on the previous quarter and by 4.6% on the same quarter in 2015. The volume measure of household spending increased by 0.7% in Quarter 4 2016 compared with the previous quarter. When comparing the volume measure of household spending in Quarter 4 2016 with the same quarter in 2015 it increased by 2.9%.
Nôl i'r tabl cynnwys4. Household spending by product
Analysis on spending by product relates to the domestic measure. In Quarter 4 (Oct to Dec) 2016, domestic spending in volume terms grew by 0.8% when compared with Quarter 3 (July to Sept) 2016. Figure 3 shows spending in volume terms (adjusted for inflation). Spending on “Housing” has made the largest contribution to the positive growth in Quarter 4 2016, increasing by 1.3% on the previous quarter, (0.3% of overall growth). Within this area, “Mains gas and LPG” showed the largest increase of 22.7% compared with Quarter 3 2016.
Figure 3: COICOP contribution to overall growth, domestic measure, chained volume measure, seasonally adjusted, UK, Quarter 3 (July to Sept) 2016 to Quarter 4 (Oct to Dec) 2016
Source: Office for National Statistics
Download this chart Figure 3: COICOP contribution to overall growth, domestic measure, chained volume measure, seasonally adjusted, UK, Quarter 3 (July to Sept) 2016 to Quarter 4 (Oct to Dec) 2016
Image .csv .xlsFigure 4 shows spending in volume terms (domestic measure, adjusted for inflation) between 2015 and 2016. During 2016, expenditure grew by 2.6 % when compared with 2015. This is the strongest annual growth since 2007 when expenditure grew by 2.8%. The main contributions to positive growth can be seen in “Recreation and culture”, “Miscellaneous” and “Transport”, contributing 0.6%, 0.4% and 0.3% respectively. With the exception of “Alcohol, tobacco and narcotics” all other areas have shown positive growth when compared with 2015.
Figure 4: COICOP Contribution to overall growth, domestic measure, chained volume measure, UK, 2015 to 2016
Source: Office for National Statistics
Download this chart Figure 4: COICOP Contribution to overall growth, domestic measure, chained volume measure, UK, 2015 to 2016
Image .csv .xls5. Focus on prices in household expenditure
The household expenditure measure of prices is an important component of the gross domestic product (GDP) deflator which is used to determine price pressures in the economy. Figure 5 shows the household expenditure implied deflator both year on year and quarter on quarter percentage change.
This quarter the seasonally adjusted household expenditure measure of prices, the implied deflator, increased by 0.7% compared with Quarter 3 (July to Sept) 2016, indicating the increase in prices that households face when purchasing goods or services.
The household expenditure deflator (seasonally adjusted) is 1.6% higher than in Quarter 4 (Oct to Dec) 2015.
Figure 5: Household expenditure implied deflator, seasonally adjusted, percentage change, UK, Quarter 4 (Oct to Dec) 2010 to Quarter 4 (Oct to Dec) 2016
Source: Office for National Statistics
Download this chart Figure 5: Household expenditure implied deflator, seasonally adjusted, percentage change, UK, Quarter 4 (Oct to Dec) 2010 to Quarter 4 (Oct to Dec) 2016
Image .csv .xlsFrom the Blue Book 2011, the consumer price index (CPI) has been used to deflate estimates of household expenditure. Figure 6 compares the household expenditure implied deflator growths in percentage terms, quarter-on-quarter a year ago, with those of the CPI from Quarter 4 2010 onwards.
Figure 6: Household expenditure implied deflator v CPI, not seasonally adjusted, quarter on same quarter a year ago, percentage change, UK, Quarter 4 (Oct to Dec) 2010 to Quarter 4 (Oct to Dec) 2016
Source: Office for National Statistics
Download this chart Figure 6: Household expenditure implied deflator v CPI, not seasonally adjusted, quarter on same quarter a year ago, percentage change, UK, Quarter 4 (Oct to Dec) 2010 to Quarter 4 (Oct to Dec) 2016
Image .csv .xls6. Household spending per head
In current price terms, seasonally adjusted, consumer spending in Quarter 4 (Oct to Dec) 2016 has now reached £4,655 per head. This is an increase of £54 (positive 1.2%) per head when compared with Quarter 3 (July to Sept) 2016. In volume terms, there has been an increase of 0.5% per head, indicating that consumers spent more because they bought more in addition to the effect of increasing prices.
In 2016, current price spending per head grew by £578 when compared with 2015, an increase of 3.3%. Total per head spending has now reached £18,326 in 2016, with “Housing” and “Transport” making the largest contributions of £4,604 and £2,490 respectively. The third-largest contribution to overall per head spending can be seen in “Miscellaneous”, where spending in 2016 reached £2,343.
Comparing spending by types of goods and services (in current price terms), households have continued to spend most on “Services”. In 2016, spending on “Services” grew to its highest level since the start of the series, and is now at £10,416, contributing 57.6% of total household spending. “Services” include spending on essential items such as “Housing” and “Transport services”.
Figure 7: Household expenditure spending per head, UK, 1997 to 2016
Source: Office for National Statistics
Download this chart Figure 7: Household expenditure spending per head, UK, 1997 to 2016
Image .csv .xls7. Household final consumption expenditure revisions Quarter 4 (Oct to Dec) 2016
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) 2016, the revisions to total household final consumption expenditure have been made from Quarter 1 (Jan to Mar) 2016.
Revisions between the previous edition of Consumer trends (Quarter 3 (July to Sept) 2016) and the latest HHFCE estimates are summarised in Table 1: Household final consumption expenditure: revisions. The revisions reflect updated data from suppliers, as well as adjustments to HHFCE as a result of the GDP balancing process.
Table 1: Household final consumption expenditure revisions, Quarter 4 (Oct to Dec) 2016
£ million | % | % | |||||
Revisions to value (current prices) | Revisions to growth (current prices) | Revisions to growth (volume measure) | |||||
2016 Q1 | -393 | -0.1 | _ | ||||
2016 Q2 | 282 | 0.2 | 0.1 | ||||
2016 Q3 | 62 | -0.1 | _ | ||||
Source: Office for National Statistics |
Download this table Table 1: Household final consumption expenditure revisions, Quarter 4 (Oct to Dec) 2016
.xls (25.6 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. User engagement seminar
We would like to invite users of the Household Income, Expenditure and NPISH estimates to a user engagement seminar.
Date – Wednesday the 26th April 2017
Time – 1pm – 5pm
Venue – 110 Rochester Row - HFMA, London, SW1P 1JP
This seminar will provide an opportunity to engage directly with key stakeholders, users and expert individuals to raise their awareness of the new data sources and methods used to produce the Household Income, Expenditure and NPISH estimates.
Nôl i'r tabl cynnwys9. Quality and methodology
The Consumer trends Quality and methodology information document 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
HHFCE terms and definitions are outlined in Table 2. Consumer trends guidance offers fuller details regarding this publication.
Table 2: Table of household final consumption expenditure terms and definitions
Term | Description |
COICOP | Classification of individual consumption by purpose. COICOP is an internationally agreed system of classification for reporting consumption expenditure within national accounts and is used by other household budget surveys across the European Union |
CPI | Consumer price index. Measures the price paid by consumers for a fixed group of goods and services. |
GDP | Gross domestic product. The measure of all services and goods produced in a country over a specific period. |
HHFCE | Household final consumption expenditure. Spending by households on products or services to satisfy their immediate needs or wants. This includes expenditure on the administrative costs of insurances but excludes capital expenditure on dwellings and valuables. |
SA | Seasonally adjusted. Seasonal adjustment removes the variations associated with the time of the year, i.e. seasonal effects; this allows consecutive quarters to be compared, providing a reliable estimate of short-term change. |
CP | Current price. Current price series (also known as nominal, cash or value series) are expressed in terms of the prices of the time period being estimated. In short, they describe the actual price charged or paid for the goods or services at time of production or consumption. |
CVM | Chained volume measure. This measure allows users to identify changes in expenditure on a good (or service) resulting from a change in the volume, rather than a change in the price of that good (or service). |
IDEF | Implied deflator. An indirect measure of inflation. Calculated as current price data divided by chained volume measure data, multiplied by 100. |
Domestic estimate | Household final consumption expenditure (HHFCE) aggregate total excluding net tourism |
National estimate | Estimate of Household final consumption expenditure (HHFCE) including net tourism expenditure. |
TOUREX | Estimates for foreign tourist expenditure in the UK. |
TOURIM | Estimates for UK tourist expenditure abroad. |
Source: Office for National Statistics |
Download this table Table 2: Table of household final consumption expenditure terms and definitions
.xls (26.6 kB)Main quality issues
Household expenditure volume series are chainlinked annually. Estimates in this Consumer trends are now based on 2013 price structures; that is, the chained volume measure estimate in 2013 equals the current price value of expenditure in 2013.
Growth in each year up to and including 2013 is calculated at average prices of the previous year. Growth from 2013 onwards is calculated at average prices of 2013. Volume series are only additive for the most recent periods; that is, annual data for 2013 onwards and quarterly data for Quarter 1 (Jan to Mar) 2014 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 which 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.
Further information
Further quarterly national accounts, quarterly sector accounts and financial accounts tables are available in the UK Economic Accounts.
Details of the policy governing the release of new data are available by visiting the UK Statistics Authority website.
Nôl i'r tabl cynnwys