Role of NSIs in analysingshort-term economic statistics

– the UK ExperienceRobin YoullDirectorShort Term Output Indicators DivisionOffice for National StatisticsUnited Kingdom

Overview

• UK experience

• Current practice

• Constraints on NSI business

• Recent developments

Background - Interpretation of STIs by UK’s ONS

• What is NSI’s role? – v. Finance Dept or Central Banks?

• Use of trend/cycle analysis?– Cause of debate in the UK– Finance Dept opposes ONS use of trends in key macro-economic

series

• But, can usefully:– Paint coherent pictures (cross referencing between sources)– Set STS in a framework (NA, LM accounting, Social Accounting)– Provide international comparisons

UK Experience - Background

• Generally ‘guarded’

• Focus is on objectivity/integrity

• Need for political neutrality

• Great interest from key policy makers – Bank of England, Finance Dept, Trade Dept, etc.

UK Experience - Current practice Many vehicles for presenting economic statistics

• First Releases /News Releases/’Nuggets’

• Web-based briefing packs

• Face-to-face briefings for analysts and journalists for ONS major releases

• Articles and papers in regular journals (‘Economic Trends’, ‘Labour market Trends’)

• Other regular fora where we describe our data

UK Experience Principles • ‘Information’ service

– not ‘news’ service

• Formulaic production – ‘search and replace’ approach to producing the releases

• ‘Silo’ based production– don’t typically cross-refer between releases

• Use ‘elevator statistics’ – e.g. 13 sectors increased in growth, while 8 fell’

• Explanations=more detail – ‘explain’ movements in our estimates by providing more

detailed estimates (‘drilling down’).

UK Experience Principles (continued)

• Occasional anecdotal evidence: – e.g. ‘Some businesses reported that World Cup 2006 may have contributed

to increased sales of football shirts this month.’

• Rarely attempt broader explanations – e.g. don’t say ‘foot and mouth has been a major factor affecting the

increased output of veterinary services this quarter.’

• Never make ‘political’ points– e.g. we would not say ‘the introduction of tax breaks for small traders may have

contributed to the increased activity in this sector in recent months.’

• Present ‘records’ – these provide ‘media fodder’ for Journalists i.e. ‘headline news’, rather than

a cogent assessment

•

UK Experience Face-to-face briefings

• Still cautious– don’t risk going off message, or providing a broader

interpretation.

• Further use of anecdote, and provision of more detail

• Never ‘forecast’ what the results may imply for what may happen next

• Occasional ‘Chatham House’ rule sessions: – e.g. quarterly Labour Market City Analysts meeting. This

allows for more open, none-attributable, remarks by ONS statisticians

UK Experience Rationale for current approach

• Time constraints– tight even just getting the standard results together.

• Consistency– Concern that changes in personnel may lead to changes in

interpretation – the so called ‘statistician effect’

• No clear user demand for anything else– True of policy departments and of analysts

• Organisational constraints– Make it hard to take a cross-cutting view

UK ExperienceRationale for current approach (continued)

• Systems constraints– systems very clunky and make non-formulaic approach

difficult

• Resource constraints– Only small team of economic analysts

• Natural caution– concern that ONS interpretation may be at odds with

consensus, or be deemed ‘political’.

What else might ONS do?

• Developing trend/cycle analysis– But note earlier observation– Issues with ‘wagging tail’

• ONS ‘Assessment’ box on statistical releases

• More detailed analytical articles– But not interpretation

• Greater emphasis on cross relating outputs– e.g. productivity, output gap, labour market, commodity flow

• Developing more open fora – e.g. under the ‘Chatham House’ rule

Conclusion

• ONS is an information service - little appetite for anything else

• ONS not in competition with policy Departments• Need for:

– Impartiality– Continuity

• Constraints– Resources– Time– Systems

• Some room to develop analysis, but not interpretation

Role of NSIs in analysingshort-term economic statistics

– the UK ExperienceRobin YoullDirectorShort Term Output Indicators DivisionOffice for National StatisticsUnited Kingdom