Quarterly sector accounts, UK: October to December 2021

• The UK’s net borrowing position with the rest of the world reduced to -1.3% as a percentage of gross domestic product (GDP) in Quarter 4 (Oct to Dec) 2021, compared with -5.1% of GDP in Quarter 3 (Jul to Sep) 2021.

• The household saving ratio decreased to 6.8% in Quarter 4 2021, compared with 7.5% in Quarter 3 2021.

• Real Household Disposable Income fell by -0.1% this quarter, nominal household’s gross disposable income grew 1.3% but this was offset by quarterly household inflation of 1.4%.

• Household’s net lending position in the non-financial account decreased to £3.4 billion (0.6% of GDP) in Quarter 4 2021 from £9.7 billion in Quarter 3 2021 (1.7% of GDP); decreased lending was driven by a rise in household spending of 1.9% from the previous quarter, spending increased on transport, net tourism, and housing and utilities.

• Non-financial corporations increased their net lending position to 3.4% of GDP in Quarter 4 2021 from 0.3% of GDP in Quarter 3 2021; within non-financial corporations, private non-financial corporations (PNFCs) increased their net property income by £13.1 billion, driven by decreased dividend payments of £11.6 billion, which was partially offset by a rise in gross capital formation of £3.5 billion.

• Financial corporations increased their net lending position to 0.8% of GDP in Quarter 4 2021 from 0.4% of GDP in the previous quarter; this was driven by a fall in gross capital formation of £6.6 billion, itself driven by increased exports of valuables, mainly non-monetary gold, of £6.7 billion and was partially offset by a fall in net property income of £2.6 billion.

• General government decreased its net borrowing position to -5.1% as a percentage of GDP in Quarter 4 2021 from -6.6% of GDP in Quarter 3 2021; within this, central government saw a fall in subsidies paid of £5.7 billion, as coronavirus (COVID-19) support schemes continued to wind down, which was partially offset by a rise in central government final consumption expenditure of £2.3 billion, driven by increased spending on health.

• In the financial account, financial corporations switched to net lending while households and rest of the world decreased their net lending; general government decreased their net borrowing but non-financial corporations switched to net borrowing, having been net lenders in the previous quarter.

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) & 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 explained

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 4 (Oct to Dec) 2021, and revisions to data from Quarter 1 (Jan to March) 2020 to Quarter 3 (Jul to Sep) 2021. 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 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.

Introduction of Web Content Accessibility Guidelines (WCAG) spreadsheets

In our March publication the Quarterly Sector Accounts data tables have been prepared in line with the GSS guidance on releasing statistics in spreadsheets.