The UK’s statistics agency is braced for official reviews into the quality of its economic output next month as delays to the release of data point to widening problems with the accuracy of its figures.
Interim findings of a “systemic” review of the Office for National Statistics by the Office for Statistics Regulation will be released in April as a widening array of problems emerge with data series, including GDP, producer prices and business profits — on top of the high-profile failure of labour market data.
In the past 10 days, the ONS has postponed key trade data, suspended publication of two price indices that help calculate GDP, and been criticised by the Institute for Fiscal Studies think-tank for “jumbled economic reasoning” in the way it revalued pension wealth.
On Friday, the agency said Mike Keoghan was leaving as deputy national statistician. He oversees key economic statistics and the development of new economic measures — and as the second-in-command has played an important role in the overall management of the ONS.
Tony Travers, professor at the London School of Economics, said the accumulating evidence of broader problems at the ONS was eroding trust in the quality of its data, with a “slow drip, drip, drip of stories” that gave “a very powerful sense that, as an institution, it has problems”.
The problems concern some of the most market-sensitive data the ONS produces, and are making it harder for the country’s top policymakers to make decisions affecting tens of millions of households.
The Bank of England’s Monetary Policy Committee this week underlined the need for “high quality and reliable official data across the full range of economic and labour market statistics”, suggesting it has broader concerns after earlier criticism by rate-setters focused on jobs data.
The OSR, an arm of the UK Statistics Authority, told the Financial Times that it expected to publish an interim report in April on the systemic review of economic statistics it launched last year.
The first phase of this review will examine the ONS’s development of administrative data sources, where progress has been much slower than envisaged, and how it has handled problems with survey design and falling response rates to household surveys.
The regulator will also publish separate reviews next month of ONS trade statistics — whose release was delayed with one day’s notice after an error dating back to 2023 was identified — and of its methodology for estimating household wealth.
The OSR said it was not yet in a position to comment on the latest problems affecting price indices on Friday.
Lord George Bridges, Conservative former chair of the House of Lords economic affairs committee, said: “The list of statistics we can’t trust continues to grow. It’s time ministers stop watching from the sidelines and ask some serious questions of the ONS. They need to ensure there is a strategy to restore faith in our economic statistics.”
Asked on Friday whether the different errors were linked or the result of the agency rechecking all of its data, the ONS said it did not “have anything to add to our statement”.
The agency said earlier that it had found flaws in its producer price indices and services producer price indices, which give a sense of price pressures within business supply chains. Release of the data would be paused “while we rectify this issue”, the agency added.
Economists and policymakers are increasingly concerned that the visible challenges hampering the ONS could reflect endemic problems that cast doubt on all its output.
“At this point, we have to treat all ONS data with a bit more caution, said Rob Wood, chief UK economist at consultancy Pantheon Macroeconomics. “It seems like there is a systemic issue that could be affecting many ONS data releases, some of which we might not yet know about.”
James Smith, research director at the Resolution Foundation think-tank, said helping the ONS fix the data problems should be a priority for the Treasury in its spending review, because they had become “a major problem for policymakers with real-world consequences”.
The Treasury did not immediately respond to a request for comment.
One big policy decision that hinges on ONS data is the annual uprating of the statutory minimum wage.
It will rise more sharply than businesses had planned for next month because of a revision to earnings data that came just before the Low Pay Commission finalised its recommendation to government last October.
“The tasks of tackling sticky inflation and economic inactivity or crafting a new trade strategy are being made much harder without decent data to underpin key judgments,” Smith said.
The regulator warned late last year that the collapse of the ONS labour force survey, which has left rate-setters without reliable jobs data for more than 18 months, meant 14 sets of data could no longer be classified as “official statistics”.
Later phases of the OSR’s overarching review of economic data will focus on how far the ONS is meeting user needs, and on whether staff and IT systems are adequately funded, appropriately deployed and effectively prioritised. The regulator will publish its final conclusions in the summer.
