Office for National Statistics (ONS) has today published an article setting out the impact on current price, or nominal, gross domestic product (GDP) of improvements to the UK National Accounts that will be introduced when revised figures, consistent with the 2018 Blue Book, are published on 29 June 2018.
The total net impact of the improvements announced today increase the level of current price GDP in 2016 by approximately £6.2 billion or 0.3%. Average annual growth in current price GDP between 1997 and 2016 remains unrevised at 3.9% per year.
The the main improvements announced today are:
Improved estimates from the Bank of England on the measurement of "net spread earnings" (NSE). NSEs are the implicit charges that financial institutions make when financial assets are exchanged, such as when foreign exchange companies buy and sell currency. This improvement adds £5.6 billion to current price GDP in 2016 but has no impact on current price GDP growth, on average, between 1997 and 2016.
A correction to the estimate of the investment in computer software. The removal of an element of double-counting in this type of investment last year had the effect of overly reducing our estimates of gross fixed capital formation (investment). This previously announced correction adds £4.3 billion to current price GDP in 2016 but has no impact on average annual growth between 1997 and 2016.
Improved data and methods for estimating the funds held by funded public sector pension schemes. This decreases current price GDP by £1.2 billion in 2016 but has no impact on annual growth between 1997 and 2016.
In addition to impacting on the level of nominal GDP, some of these improvements, particularly the new estimates for NSEs, also affect our estimates of the UK’s trade balance. On average these improvements decrease the UK’s total trade deficit by 0.2% of GDP between 1997 and 2016, with the biggest impact coming in 2016 when the trade deficit decreased by £9.8 billion or 0.5% of GDP.
ONS Director of National Accounts Transformation Darren Morgan said:
“Improved estimates are allowing us to shine new light on the financial sector, helping us to paint a better picture of UK financial exports.
“By utilising new data sources and introducing improved methods we are ensuring ONS is measuring our changing digital economy in the best way possible.”
ENDS
Background notes
- The full ‘Impact of Blue Book 2018 changes on current price gross domestic product estimates: 1997 to 2016’ is available here: https://www.ons.gov.uk/releases/impactofbluebook2018changesoncurrentpricegrossdomesticproductestimates1997to2016
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