Changes to household estimates in Blue Book 2015

Household Accounts Development

Overview

• Why do we have revisions?

• Size of revisions

• Overview of each methodological change

Why change?

• ESA 1995 changes to ensure comparability in measuring Gross National Income (GNI) across European Union (EU) countries, and,

• Other changes to meet user needs.

Annual HHFCE level revisions

Three main drivers of revisions

Change in annual HHFCE growth rates

Exhaustiveness Revisions

£, million

Exhaustiveness - Concealed income/ activity

• Replaces existing National Accounts concealed income/activity model

• New model based in part on HMRC Tax Gaps data

• Coherence adjustments are made during balancing to bring this measure into alignment with GDP(P) and GDP(I).

Exhaustiveness - Under-coverage of unincorporated small businesses

• Enterprises falling below the Value Added Tax (VAT) and/or Pay As You Earn (PAYE) thresholds, are not recorded on the Inter-Departmental Business Register (IDBR).

• Estimates of missing production by these updated using more recent administrative data provided by HMRC.

NPISH improvements - Revisions

£, million

NPISH improvements

• Review of the potential overlap between NCVO data and existing National Accounts production data from the ABS that has led to a reduction in HHFCE

• Assessment of the new offsetting revisions used to align the three approaches to measuring GDP in the Supply has brought about a further reduction in HHFCE.

£, million

Revisions linked to rental data

Cross Border Property Income

• Reviewed the recording of imputed rental for• UK residents owning second homes abroad and • foreign residents owning second homes in the UK.

• Changes have;• Decreased HHFCE via Inward imputed rental • Increased HHFCE via Outward imputed rental

Improvements to actual and imputed housing rentals - CPIH

• Revisions to maintain alignment in annual growth with CPIH

• CPIH - a measure of consumer price inflation that includes Owner Occupiers’ Housing costs (OOH).

Revisions due to Narcotic Drugs, Alcohol & Tobacco

£, million

Alcohol/Tobacco & Illegal Drugs

• Removal of adjustments affecting;• COICOP 02.1, Alcohol, and • COICOP 02.2, Tobacco.

• Narcotics data, COICOP 2.3, introduced for the first time in Blue Book 2014

• Correction in BB15 converting dollars to sterling for growth in street prices of narcotics

Other revisions

£, million

Any questions?