ONS stats changes: we're all about to get richer

The Office for National Statistics has announced sweeping changes to the way it measures the economy. Households are about to be a lot better off - although as a nation, we'll be in £100bn more debt.

by Emma Haslett
Last Updated: 29 Apr 2014

Strange happenings at the Office for National Statistics: the office in charge of telling us how well/badly the economy is doing has decided to make sweeping changes to how it measures - well, pretty much everything.

It's all rather mind-boggling, but essentially when the new measures come in in the autumn, the economy will miraculously get bigger: it's going to grow faster and as a nation we'll get richer. With the stroke of a statistician's pen. Not bad for a day's work, eh?

Under the new system:

  • Research and development will be reclassified as capital spending and will count towards GDP rather than, as it is now, being classified as a cost of production. This will add between 2.5% and 5% (£40bn-£75bn) to GDP.
  • Pensions will be counted as present income - which means we're all about to be better off (in MT's case, by about £500. Hurrah). That will increase the savings ratio (how much we save vs how much we spend) by about 'five percentage points', almost doubling it to about 10%.
  • The way illegal activity (by which one assumes they mean the black market) is measured in gross national income stats will change, adding £10bn to the economy.
  • The way non-profit institutions serving households are measure will add another £25bn.
  • Public sector net debt will increase by more than £100bn, or 7%. Which is less good.

By now, we're all used to working in billions - but even by those standards, these figures are massive. Of course, nothing will change in reality - but it does put the UK more in line with its European counterparts, most of whom have been using similar measurements for years.

Want to know more? The ONS has (rather helpfully) set out all its plans on Storify. It's an unusual move, but it does mean you can read the whole thing here...

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