Quarterly sector accounts, UK: July to September 2020

• The households saving ratio decreased to 16.9% in Quarter 3 (July to Sept) 2020, a decrease from the record of 27.4% in Quarter 2 (Apr to June) 2020.

• Households consumption spending increased by £50.7 billion (19.6%) in Quarter 3 after the largest quarterly fall in nominal household spending ever recorded in the previous quarter; the increase in the latest quarter has been driven by a recovery in household spending in restaurants and hotels, and transport.

• The households net lending position continued to increase to £46.5 billion, down from a record net lending position of £88.7 billion in Quarter 2; this equates to 8.6% of gross domestic product (GDP) in Quarter 3 compared with 18.6% in Quarter 2.

• General government saw a decrease in its net borrowing position to £69.6 billion in Quarter 3 from £103.1 billion in the previous quarter, which equates to negative 12.9% of GDP in Quarter 3 compared with negative 21.6% in Quarter 2; the main drivers were the coronavirus (COVID-19) intervention job support schemes.

• Non-financial corporations net lending increased to £7.4 billion in Quarter 3 following net lending of £4.9 billion in the previous quarter; this equates to 1.4% of GDP in Quarter 3 compared with 1.0% of GDP in Quarter 2.

• In the financial account, general government, financial corporations and non-profit institutions serving households (NPISH) were net borrowers - all other sectors were net lenders.

Chained volume measures

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

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.

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.

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.

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.

Revisions within this release

This bulletin includes new data for the latest available quarter, Quarter 3 (July to Sept) 2020 and revisions to data from the start of a data time series to .

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.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Quarterly sector accounts QMI.