The Office for National Statistics has today published articles setting out the indicative effect on the sector and financial accounts of some of the previously announced improvements to the national accounts, which will be introduced when revised figures, consistent with Blue Book 2017 and Pink Book 2017, are published on 29 September 2017.
The impact of improved estimates by ONS of the interest paid on UK corporate bonds on the current account deficit and UK gross national income (GNI) are being published. In addition, we are also publishing new estimates separating households from non-profit institutions serving households (such as charities and most universities) for the first time and using new data sources to better estimate households’ financial position.
The improved estimates of corporate bond payments are being calculated by making better use of data from the Bank of England as part of the Flow of Funds project, which will transform our statistics on the financial sector. Overall, these data show companies were paying more in interest payments on those bonds than previously estimated. As some of the bonds are held overseas this means that, on average, the current account deficit is larger than previously thought while GNI is lower.
The new estimates for households, separating out non-profit institutions serving households and utilising new data from HM Revenue and Customs and improved methods, show that an increasing number of self-employed people have been incorporating their businesses and paying themselves increasing levels of dividends, meaning household income was higher than previously thought.
The combined impact of removing non-profit institutions serving households and improving methods revises the household saving ratio by between negative 0.3 percentage points in 2001 and positive 1.9 percentage points in 2008. The majority of the revisions are upwards and they are larger after 2003. The average absolute revision to the household saving ratio is 0.8 percentage points.
The improvements announced today change the current account deficit by between negative £3.0 billion in 1997 and positive £19.6 billion in 2007 (when the deficit widened from 2.4% to 3.7% of gross domestic product (GDP)), with the average absolute revision being £8.4 billion. The impact on UK GNI is between negative £17.0 billion in 2007 and positive £11.9 billion in 1997, with the average absolute revision being £7.3 billion.
Commenting on today’s improvements, ONS Chief Economist Nick Vaughan said:
“The UK has an unusually large and complex financial sector. Measuring interest payments is a challenging process but by using data sources better, as part of our plans to transform the way we collect and publish statistics, we are now able to give a much improved estimate of Britain’s financial sector and its relationship with the rest of the world.
“The improved household figures show they are earning and saving significantly more than we previously thought. The biggest change comes from new data on the increased level of self-employment in recent years.”
The impact of further changes (including the measurement of security dealers) that affect the sector and financial accounts will be announced on 5 June 2017.
The full National Accounts Articles – Impact of Blue Book 2017 Changes on the Sector and Financial Accounts, 1997 to 2012 article is available on our website.
Full details on the planned improvements being implemented in the 2017 Blue and Pink Books are available on our website.
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