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Presentation on theme: "ONS Economic Forum #ONSeconomy Website: involved/events/events/economic-forum/index.html"— Presentation transcript:

1 ONS Economic Forum #ONSeconomy Website: involved/events/events/economic-forum/index.html involved/events/events/economic-forum/index.html 15 January

2 ONS Economic Forum – January Introduction & welcome 10.00Johnson review of price statistics 11.00Refreshment break 11.30What’s new 12.10What’s next 12.30Close 2 Agenda

3 Introduction and welcome John Pullinger, National Statistician ONS Economic Forum 15 January

4 The Johnson Review Paul Johnson, Institute for Fiscal Studies ONS Economic Forum: 15 January

5 What’s new Peter Patterson, Deputy Chief Economic Adviser ONS Economic Forum 15 January

6 Latest ONS economic statistics, including quarterly national accounts New quarterly release on indicators of economic well-being NA measure of living standards - relationship between RHDI and GDP growth Variations in the inflation experience of UK households What’s new - outline 6

7 Sharp fall in inflation to 0.5%, record low 7 % changes on a year earlier

8 GDP growth stabilised in 2.5-3% annual range during past year 8

9 Revisions to three measures of GDP 9

10 Mean revisions to GDP growth estimates 10 Source: OECD 4 time intervals: M5_P 5 mths Y1_P 1 year Y2_P 2 years Y3_P 3 years Percentage points

11 Services maintain the momentum of growth 11 More than half of growth in services output (or 70% of cumulative GDP growth) since 2011 is due to 3 sectors: Other professional service activities Admin & support service activities Real estate activities

12 Sectoral financial balances 12

13 UK current account deficit 13

14 Primary income balance 14

15 Economic Well-being Q Traditional measures of progress such as GDP are increasingly considered an incomplete picture of the state of the nation. First of regular quarterly bulletins to coincide with QNA. Economic Well-being provides a fuller understanding of the economy & how it impacts on national well-being To give a more rounded and comprehensive basis for assessing changes in material well-being 15

16 GDP, GDP per head and NNDI per head 16

17 GDP and household income per head 17

18 Cumulative contributions to growth since 2007 – GDP and RHDI 18 GDP = £1,618bn in 2011

19 Variation in the inflation experience of UK households Developed alongside the Johnson Review, this paper is one response to their second recommendation: the regular publication of inflation indices for sub-groups in the UK Uses micro-level expenditure data and detailed price indices to estimate inflation rates for: o Expenditure and income deciles o Households with and without children o Retired and non-retired households Published 15 th December 2014, it is the first UK paper to do this on a CPI consistent basis Full methodology and supporting documents available online, headline results presented here 19

20 Lower income households have experienced higher inflation rates... Note: 1= lowest income, 10= highest income 20

21 ... as have lower expenditure households Note: 1= lowest expenditure, 10= highest expenditure 21

22 Retired households have experienced higher price increases than non-retired households... 22

23 ... mostly because of Energy & Fuel costs 23

24 Headline results, average inflation % Group Inflation Decile of Disposable Income Expenditure Households with Children2.4 Households without Children2.7 Retired Households 2.8 Non-Retired Households2.5 CPI

25 What’s next Frankie Kay, Head of National Accounts Methods and Development Derek Bird, Head of Prices ONS Economic Forum 15 January

26 What’s next - outline ONS response to NSQR of National Accounts and BoP Flow of Funds Blue Book 2015 plans New ONS website Prices update – owner occupier housing costs, house price consultation, web- scraping and scanner data 26

27 NSQR of National Accounts and Balance of Payments ONS Response - Overview ONS very supportive of review recommendations and suggestions and grateful to Dame Kate Barker and Art Ridgeway ONS accepts most of the recommendations completely and partially accepts the remainder (where full acceptance requires further practical considerations, review or consultation) Response to the review means we will: develop annual volume balanced Supply and Use tables. This will include the introduction of annual double deflation of Gross Value Added, reintroduction of the Purchases survey and a possible change to the alignment of GDP(O) with annual expenditure. develop the IDBR review capital stock methodology including consultation with experts prioritise development of the extended flow of funds dataset draw on wider statistical and economic expertise to support and enhance our work Response work will be open to public consultation later in 2015 and will influence future work plans 27

28 Flow of Funds Developing financial data is considered essential for identifying the build-up of risks in the financial sector and to understand better the financial connections. An important part of this development is the ‘Flow of Funds’. New tables published in BB14 (Chapter 14). 28

29 Flow of Funds ONS is considering wider options for developing Flow of Funds datasets, in conjunction with the Bank of England Wider consultation and user engagement will be taken forward this year A business case is being prepared around options by May/June

30 Scope of BB 2015 On-going work to address Gross National Income (GNI) reservations Classification changes Other methodological improvements Take on of new data and moving forward base and reference year 30

31 BB15 Communications Similar process to Blue Book 2014 Series of articles on impact of changes Seminars and user groups External peer review 31

32 Saving and “visible” income Users have requested a measure of the saving ratio that corresponds more closely to the economic factors that are pertinent to households' decisions on what to spend and what to save. ONS considering whether to publish a supplementary indicator that users may find useful, including reviewing the approach taken by other countries Stakeholders will be consulted ahead of any publication 32

33 33

34 House price index consultation User consultation around the development of a single 'official' house price index - closed 12 December Over 40 responses received and good attendance at a series of user events held across UK. ONS will publish formal response to the consultation by mid-March Further work to follow after which a case for the next stage of the development will be put before departments for agreement to proceed. 34

35 Owner occupiers’ housing costs in CPIH National Statistics status was suspended for CPIH in August 2014 ONS and VOA have completed work looking into Owner Occupiers’ Housing (OOH) component Growth in private rents now more responsive to recession Still at odds with HPI, but rents a stock measure and HPI a flow measure 70% of rent updates result in no price change 35

36 OOH - next steps Improvements to OOH in CPIH will be introduced as part of the 2015 annual update on 24 March 2015 Revise only OOH component of CPIH back to 2005 Article documenting the improvements to be published 30 January 2015, responds to Johnson Review: Recommendation 21 Planned user event in February/March around housing statistics 36

37 OOH - next steps Also take opportunity of revision to VOA data to align OOH weight in CPIH with national accounts estimates historically and anticipate methodological changes to the measurement of imputed rents, planned for BB16. Begin process for re-accreditation of National Statistic status for CPIH (from 30 January 2015), aim for process to be completed March/April

38 Prices by webscraping ONS is looking at alternative options for obtaining price quotes including: 1. Scanner data 2. Web scraping Web scraping can be: 1. collected by the ONS directly 2. purchased. ONS is investigating both of these options – in two research phases Phase one: Web scraping started in April 2014 collecting 35 CPI/RPI items from 3 online supermarkets – 6,500 price quotes collected daily Prototype cleaning and classifying programs have also been set up – and exploratory analysis is being conducted on the data Phase two: Will assess data ONS has recently purchased from, and further explore methodological and technical challenges of using such data..... Warburtons Toastie Sliced White Bread 800G Delivering the freshest food to your door- Find out more > £1.45 (£0.18/100g) Add to basket

39 Prices by webscraping Such data has the benefits of: 1. Being high frequency 2. Collecting many items 3. Timely collection It has its challenges, such as: 1.Item classification 2. Methodological challenges 3. Website diversity 4. Website change 5. Cleaning challenges ONS is learning/using open source tools, data science concepts and big data technologies to overcome these challenges High frequency data allow detailed investigation of price distributions at the lowest level The production of (very) experimental indices...more methodological research needed 39

40 Scanner Data Project Scanner data are point of sale data held within retailers’ systems. They can: o provide real-time price and quantity information, allowing for use of up to date weights o allow for complete coverage of sales by selected retailers o create data handling and acquisition challenges ONS has test scanner data from one UK retailer for two products (shampoo and toothpaste) Investigations are in early stages o Continue to explore potential uses o Learn from other countries whose research is further advanced 40

41 Forthcoming event – Trade & Balance of Payments Seminar 9.00am to 1.00pm, Friday 23 January Will cover:  trade balance developments and why deficit persists.  UK net income account and its recent deterioration.  the UK's net international investment position and its expanding deficit.  change in the treatment of banks' profits and the impact on BoP up to, during and since the financial crisis. 41

42 ONS Economic Forum #ONSeconomy Website: involved/events/events/economic-forum/index.html involved/events/events/economic-forum/index.html 15 January

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