1. Role of NSIs in analysing short-term economic statistics – the UK Experience Robin Youll Director Short Term Output Indicators Division Office for National Statistics United Kingdom

2. Overview UK experience Current practice Constraints on NSI business Recent developments

3. Background - Interpretation of STIs by UK’s ONS What is NSI’s role? –v. Finance Dept or Central Banks? Use of trend/cycle analysis? –Cause of debate in the UK –Finance Dept opposes ONS use of trends in key macro-economic series But, can usefully: –Paint coherent pictures (cross referencing between sources) –Set STS in a framework (NA, LM accounting, Social Accounting) –Provide international comparisons

4. UK Experience - Background Generally ‘guarded’ Focus is on objectivity/integrity Need for political neutrality Great interest from key policy makers –Bank of England, Finance Dept, Trade Dept, etc.

5. UK Experience - Current practice Many vehicles for presenting economic statistics First Releases /News Releases/’Nuggets’ Web-based briefing packs Face-to-face briefings for analysts and journalists for ONS major releases Articles and papers in regular journals (‘Economic Trends’, ‘Labour market Trends’) Other regular fora where we describe our data

6. UK Experience Principles ‘Information’ service –not ‘news’ service Formulaic production –‘search and replace’ approach to producing the releases ‘Silo’ based production –don’t typically cross-refer between releases Use ‘elevator statistics’ –e.g. 13 sectors increased in growth, while 8 fell’ Explanations=more detail –‘explain’ movements in our estimates by providing more detailed estimates (‘drilling down’).

7. UK Experience Principles (continued) Occasional anecdotal evidence: –e.g. ‘Some businesses reported that World Cup 2006 may have contributed to increased sales of football shirts this month.’ Rarely attempt broader explanations –e.g. don’t say ‘foot and mouth has been a major factor affecting the increased output of veterinary services this quarter.’ Never make ‘political’ points –e.g. we would not say ‘the introduction of tax breaks for small traders may have contributed to the increased activity in this sector in recent months.’ Present ‘records’ –these provide ‘media fodder’ for Journalists i.e. ‘headline news’, rather than a cogent assessment

8. UK Experience Face-to-face briefings Still cautious –don’t risk going off message, or providing a broader interpretation. Further use of anecdote, and provision of more detail Never ‘forecast’ what the results may imply for what may happen next Occasional ‘Chatham House’ rule sessions: –e.g. quarterly Labour Market City Analysts meeting. This allows for more open, none-attributable, remarks by ONS statisticians

9. The Chatham House Rule participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed; nor may it be mentioned that the information was received at a meeting of the Institute.

10. UK Experience Rationale for current approach Time constraints –tight even just getting the standard results together. Consistency –Concern that changes in personnel may lead to changes in interpretation – the so called ‘statistician effect’ No clear user demand for anything else –True of policy departments and of analysts Organisational constraints –Make it hard to take a cross-cutting view

11. UK Experience Rationale for current approach (continued) Systems constraints –systems very clunky and make non-formulaic approach difficult Resource constraints –Only small team of economic analysts Natural caution –concern that ONS interpretation may be at odds with consensus, or be deemed ‘political’.

12. What else might ONS do? Developing trend/cycle analysis –But note earlier observation –Issues with ‘wagging tail’ ONS ‘Assessment’ box on statistical releases More detailed analytical articles –But not interpretation Greater emphasis on cross relating outputs –e.g. productivity, output gap, labour market, commodity flow Developing more open fora –e.g. under the ‘Chatham House’ rule

13. 0 Trends and labour market statistics How do we assess them?

14. Conclusion ONS is an information service - little appetite for anything else ONS not in competition with policy Departments Need for: –Impartiality –Continuity Constraints –Resources –Time –Systems Some room to develop analysis, but not interpretation

15. Role of NSIs in analysing short-term economic statistics – the UK Experience Robin Youll Director Short Term Output Indicators Division Office for National Statistics United Kingdom