Quarterly sector accounts, UK: April to June 2022

• Estimates published for the first time today, 30 September 2022, are consistent with several methodological improvements to the institutional sector accounts introduced as part of our annual improvement programme; we discussed indicative impacts of changes to the main financial and non-financial accounts estimates in our Detailed assessment of changes to institutional sector accounts: 1997 to 2020 article.

• The UK’s net borrowing position with the rest of the world was 5.6% as a percentage of gross domestic product (GDP) in Quarter 2 (Apr to June) 2022, compared with borrowing of 7.3% of GDP in Quarter 1 (Jan to Mar) 2022.

• Real household disposable income (RHDI) fell by 1.2% this quarter driven by costs associated with housing and price increases in restaurants and hotels.

• Nominal household gross disposable income grew by 1.8% but was offset by quarterly household inflation of 3.1%; the largest quarterly growth in household inflation since Quarter 4 (Oct to Dec) 1981, when it was 3.2%.

• The household saving ratio fell to 7.6% in Quarter 2 2022 from 8.3% in Quarter 1 2022, but remains higher than before the coronavirus (COVID-19) pandemic.

• Households saw a decrease in their net lending position to 1.4% as a percentage of GDP in Quarter 2 2022, down from 1.8% of GDP in Quarter 1 2022; this was driven by increased expenditure on transport, restaurants and hotels, gas and electricity, miscellaneous goods, and food and drink.

• General government has reduced its net borrowing position to 4.9% as a percentage of GDP in Quarter 2 2022 from 6.7% in Quarter 1 2022, primarily reflecting a drop in health expenditure.

• Non-financial corporations decreased their net borrowing position to 1.9% as a percentage of GDP in Quarter 2 2022 from 2.1% in Quarter 1 2022, primarily reflecting lower dividend payments paid out by UK businesses.

• Financial corporations decreased their net borrowing position to 0.1% as a percentage of GDP in Quarter 2 2022 from 0.5% in Quarter 1 2022, primarily reflecting a lower acquisition of valuables, especially non-monetary gold.

Seasonal adjustment

All figures given in this bulletin are adjusted for seasonality unless the financial accounts are under discussion or otherwise stated. Seasonal adjustment removes seasonal or calendar effects from data to enable more meaningful comparisons over time.

Current price

Current price series are expressed in terms of the prices during the time period being estimated. These describe the prices recorded at the time of production or consumption and include the effect of price inflation over time.

Chained volume measures

Chained volume series (also known as real terms) have had the effects of inflation removed.

Gross disposable household income (GDHI) and Real household disposable income (RHDI)

Gross disposable household income (GDHI) is the estimate of the total amount of income that households have available to either spend, save, or invest including income received from wages (and the self-employed), social benefits, pensions, and net property income (that is, earnings from interest on savings and dividends from shares) less taxes on income and wealth.

Adjusting GDHI to remove the effects of inflation gives real household disposable income (RHDI). This is a measure of the real purchasing power of households’ income, in terms of the physical quantity of goods and services they would be able to purchase if prices remained constant over time.

The households’ saving ratio

The saving ratio estimates the amount of money households have available to save as a percentage of their gross disposable income plus pension accumulations.

Net lending or borrowing

The net lending of a sector represents the surplus resources that a sector makes available to other sectors, net borrowing represents their financing of a deficit from other sectors.

Net lending means a sector has money left over after its spending and investment in a given period, whereas net borrowing means it has spent and invested more than it received and has a need for financing, which may be covered by borrowing, issuing shares or bonds, or by drawing on reserves.

Revisions within this release

This bulletin includes new data for the latest available quarter, Quarter 2 (Apr to June) 2022, and revisions to data from the start of a time series to Quarter 1 (Jan to Mar) 2022. This bulletin follows the National Accounts Revisions Policy.

Understanding the sector and financial accounts

This release presents analysis on UK aggregate data for the main economic indicators and summary estimates from the institutional sectors of the UK economy that are presented in the UK Economic Accounts (UKEA) dataset:

• public corporations

• private non-financial corporations

• financial corporations

• households

• non-profit institutions serving households (NPISH)

• central government

• local government

• rest of the world

This release uses data from the UKEA and provides detailed estimates of national product, income and expenditure, UK sector, non-financial and financial accounts, and UK Balance of Payments. These accounts are the underlying data that produce a single estimate of gross domestic product (GDP) using income, production, and expenditure data.

Quality and Methodology Information report

The Quarterly sector accounts 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

System of National Accounts consultation

As part of an update to the System of National Accounts, the United Nations (UN) are in the process of consulting on several areas being considered for improvement. Previous and live consultations can be found on the UN Statistics Division website. If you would like to discuss any of these consultations with the Office for National Statistics (ONS), please contact us at sna.consultations@ons.gov.uk. Bodies outside the UK National Statistical System are also free to respond to the consultations themselves.

Economic statistics governance after EU exit

Following the UK’s exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK’s statistical system.

At the centre of this new governance framework will be the new National Statistician’s Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world leading. The advice NSCASE provides to the National Statistician will span the full range of domains in economic statistics, including the National Accounts, fiscal statistics, prices, trade and the balance of payments and labour market statistics.