What are the national accounts and for what are they used?
The national accounts provide an integrated description of all economic activity within the economic territory of the UK, including activity involving both domestic units (for example individuals and institutions resident in the UK) and external units (those resident in other countries). In addition to being comprehensive, the accounts are fully integrated and internally consistent.
The coverage of the core accounts is wide, encompassing:
redistribution of income
and the financing of the above
Additionally, accounts are produced for the regions, sub-regions and local areas of the UK, as are satellite accounts which cover activities linked to the economy, but separate from the core accounts, most notably the environmental accounts.
The majority of the core accounts deal with transactions between the various sectors of the economy, such as:
as well as transactions with the rest of the world.
The national accounts are produced in line with international standards, most notably the European System of Accounts 1995 (ESA95) which is enforced for all European Union Member States through an EU regulation. ESA95 is in turn consistent with the United Nations System of National Accounts 1993 (SNA93). The SNA93 has
recently been updated as SNA 2008 and in turn the ESA95 is being revised and will form ESA 2010, which will subsequently be implemented in the UK national accounts, as well as those of all other EU member states.
The national accounts are drawn together using data from many, many different sources. These different sources not only help to ensure that the national accounts are comprehensive: they provide different perspectives on the economy, for example sales by retailers and purchases by households. By comparing and contrasting these different sources, the national accounts produce a single picture of the economy which is consistent, coherent and fully integrated.
Headline economic statistics
Many of the most well-known economic statistics are produced within the national accounts, including Gross Domestic Product, the household saving ratio, public sector net borrowing, the balance of trade and household consumption. These, along with other key statistics from the national accounts, will be discussed in more detail in subsequent chapters.
National Accounts Uses
Domestically, the national accounts are heavily used by policy makers and analysts. They feed into the discussions of the Monetary Policy Committee of the Bank of England when setting interest rates and they are also used by the Office for Budgetary Responsibility in forecasting economic growth and public sector debt. Components of the national accounts are used by decision makers and advisers across the whole of society, including corporations, private individuals and government. Furthermore, many of the national accounts statistics are provided to Eurostat (the statistical office of the European Union) and are used by institutions such as the European Central Bank. The largest proportion of the UK’s contribution to the EU budget is determined by the level of gross national income, a key statistic from the national accounts. Conversely, EU payments to 'deprived' regions of the union are determined by regional gross domestic product per head of population.
More information is available from the article entitled UK National Accounts – a short guide (105.5 Kb Pdf) .