ONS Economic Forum #ONSeconomy Website: involved/events/events/economic-forum/index.htmlhttp:// involved/events/events/economic-forum/index.html 8 October

What’s next ONS Economic Forum 8 October

Flow of Funds Nick Vaughan: Director, National Accounts & Economic Statistics 3

Objectives of session The Flow of Funds – what is it and why is it important? What do we want to develop? Current and future plans – How will we get there? 4

What is Flow of Funds? Measures financial flows and levels across sectors of the economy - provides information on debtor/creditor relationships and changes in financial assets & liabilities Exists to some extent already in the UK Economic Accounts publication – ONS publish financial accounts and balance sheets for each sector of the economy on a quarterly and annual basis; -Sectors include; Public Corps, Private Non Financial Corps, Financial Corps, Government, Households, NPISH, Rest of the World 5

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Why is it important? The recent financial crisis exposed a significant lack of information within the financial sector. Expanding Flow of Funds is essential for: identifying the build-up of risks in the financial sector detecting emerging imbalances between sectors investigating trends in balance sheet positions macroeconomic & macro-prudential policymaking 7

What do we want to develop? The UK accounts do not currently show counterpart data Want to implement Flow of Funds matrices for each financial instrument that show counterpart information, ie accounts published on a whom-2- whom basis Develop 2 new accounts; Revaluation (nominal holdings & gains) and Change in Volume of Assets & Liabilities; part of the full sequence of accounts 8

A Flow of Funds matrix – example 9

How will we get there? Publishing new tables as part of Blue Book 2014 – dedicated Flow of Funds chapter (14) Tables will show data already published in the accounts BUT in a different format as requested by key users Work with our users; Bank, Treasury, BIS and OBR – includes launch of working group and allocation of resources in both ONS and Bank of England Re-development of ONS suite of financial surveys Investigation into use of administrative data/Big data Learn from other National Statistical Institutions through liaison with EU member states and wider For more information please 10

Economic wellbeing Valerie Fender - Economic Adviser, Economic Wellbeing ONS Economic Forum 8 October

Economic Well-being: Background GDP inevitably and correctly plays a central role in monetary and fiscal policy Traditional measures of progress such as GDP are increasingly considered an incomplete picture of well-being Additional economic, social and environmental measures are needed alongside GDP to provide a complete picture of how society is doing UK’s Measuring National Well-being (MNW) Programme was launched in November 2010 to take this work forward 12

Economic Well-being: Work to date Economic Well-being article in April 2014 Development Measuring National Well-being domains – Economy and other relevant Development of a framework for economic well-being Selection of an indicator set 13

14 Objective and Subjective measures Emphasising the Household Perspective Economic Well -being CurrentFutureEquality

Way forward Methods and concepts article published in November 2014 Regular publication of the additional measures – Quarterly release from 23 rd December Continue to develop and refine additional measures natural and human capital measures of unpaid household work Review headline measures of Measuring National Well-being 15