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Statistical bulletin: Consumer Trends, Q1 2014 This product is designated as National Statistics

Released: 27 June 2014 Download PDF

Key Points

  • In Q1 2014, household spending (adjusted for inflation) grew by 0.8% (£2.0 billion).
  • The main contribution to growth can be seen in ‘Transport’ which has increased by 2.3% compared with Q4 2013. The largest negative contribution to growth can be seen in ‘Food and drink’ which has fallen by 1.3% compared with Q4 2013.
  • Household spending when compared with the same quarter a year ago has been rising each quarter since Q1 2012 and was 2.2% higher in Q1 2014.
  • The current price value of household spending, which includes inflation, shows how much UK households spent. In Q1 2014 current price spending increased by 1.0% compared with Q4 2013, continuing the trend of positive growth since Q3 2009.
  • The household expenditure implied deflator grew by 0.2% in Q1 2014. Within household spending categories the ‘Alcohol and tobacco’ implied deflator showed the largest increase in percentage terms, it grew by 4.3% in Q1 2014.

Summary of Household Expenditure in Q1 2014

The volume measure provides an estimate of the amount of goods and services purchased by households. In Q1 2014 it increased by 0.8%. The current price value of household spending (inflation included) shows how much UK households spent. In Q1 2014 it increased by 1.0% compared with Q4 2013. Current price spending has shown positive growth since Q3 2009. Figure 1 compares the levels of current price and volume spending from 2008 onwards.

Figure 1: Quarterly Household Final Consumption Expenditure Total (£ billion), Seasonally Adjusted

Figure 1: Quarterly Household Final Consumption Expenditure Total (£ billion), Seasonally Adjusted
Source: Office for National Statistics

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Household Spending by Product

Figure 3 shows spending in volume terms (adjusted for inflation) on ‘Transport’ has made the largest contribution to the positive growth in Q1 2014, increasing by 2.3% on the quarter. Within ‘Transport’  ‘Motor cars’ showed the largest increase of 9.8% compared with Q4 2013. 

The largest negative contribution to growth over this quarter can be seen in ‘Food and drink’ which has fallen by 1.3% in volume terms. This is driven by decreased spending on ‘Vegetables’ which has fallen by 3.8% and ‘Milk, cheese and eggs’ which has fallen by 2.4%.

Figure 3: COICOP Contribution to Overall Growth, Domestic Measure, Chained Volume Measure, Seasonally Adjusted

Figure 3: COICOP Contribution to Overall Growth, Domestic Measure, Chained Volume Measure, Seasonally Adjusted
Source: Office for National Statistics

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Focus on Prices in Household Expenditure

The household expenditure measure of prices is an important component of the GDP deflator which is used to determine price pressures in the economy. Figure 4 shows the household expenditure implied deflator both year on year and quarter on quarter percentage change.

This quarter the seasonally adjusted household expenditure measure of prices (the deflator) increased by 0.2%. This continues the trend of positive deflator growth since Q2 2012, indicating the increased prices that households face when purchasing goods or services. The household expenditure deflator (seasonally adjusted) is 1.9% higher than in Q1 2013.

‘Housing’ as the largest category of household expenditure has the most impact on the overall implied deflator.  This quarter, the ‘Housing’ implied deflator fell by 0.6% when compared with Q4 2013, this has subdued the overall implied deflator growth. The majority of other expenditure categories have contributed positively to growth in the implied deflator, the largest of these in percentage terms is ‘Alcohol and tobacco’ which grew by 4.3% when compared with Q4 2013.

 

Figure 4: Household Expenditure Implied Deflator, Seasonally Adjusted, Percentage Change

Figure 4: Household Expenditure Implied Deflator, Seasonally Adjusted, Percentage Change
Source: Office for National Statistics

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From Blue Book 2011, CPI has been used to deflate estimates of Household Expenditure.  Figure 5 compares the household expenditure implied deflator growths in percentage terms, quarter on the same quarter a year ago, with those of the CPI from 2008 onwards.

Figure 5: Household Expenditure Implied Deflator v CPI, Not Seasonally Adjusted, Year-on-Year, Percentage Change

Figure 5: Household Expenditure Implied Deflator v CPI, Not Seasonally Adjusted, Year-on-Year, Percentage Change
Source: Office for National Statistics

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Household Final Consumption Expenditure Revisions Q1 2014

In common with all components of UK Gross Domestic Product (GDP), household final consumption expenditure (HHFCE) estimates are subject to the revisions policy of the UK National Accounts. This allows revisions to estimates to be made at particular times of the year.

In Q1 2014, the revisions to total household final consumption expenditure have been made from the first quarter of 2013. 

Revisions between the previous edition of Consumer Trends (Q4 2013) and the latest HHFCE estimates are summarised in Table 1 ‘Revisions to Household Final Consumption Expenditure’.  They reflect updated data from suppliers, as well as adjustments to HHFCE as a result of the GDP balancing process.

Table 1: Household Final Consumption Expenditure Revisions, Q1 2014

  £ million % %
Revisions to value (current prices) Revisions to growth (current prices) Revisions to growth (volume measure)
2013 77 _ _
   
2013 Q1 22 _ -0.1
2013 Q2 71 _ 0.1
2013 Q3 -123 -0.1 _
2013 Q4 107 0.1 _

Table source: Office for National Statistics

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All growth rates in Consumer Trends are rounded to one decimal place. This may cause disparity between revisions displayed in the main Consumer Trends tables and the revisions table.

Background notes

  1. Date of this publication: 27 June 2014.

  2. Next edition: The next edition of Consumer Trends, Q2 2014, will be published on 30 September 2014.  Estimates will be consistent with Blue Book 2014.

  3. Release policy: Household Final Consumption Expenditure estimates produced in Consumer Trends are produced according to the National Accounts timetable. The preliminary estimate of GDP for the first quarter of 2014 will be published on 25 July 2014, followed by the second estimate of GDP on 15 August 2014. The next full set of Quarterly National Accounts will be published on 30 September 2014.

  4. Basic Quality Information for Consumer Trends Statistical Bulletin

    Summary quality reports. A Summary Quality Report (147.1 Kb Pdf) for this Statistical Bulletin can be found on the ONS website. 

    Key quality issues. Household expenditure volume series are chainlinked annually. Estimates in this Consumer Trends are now based on 2010 price structures i.e. the chained volume measure estimate in 2010 equals the current price value of expenditure in 2010.

    Growth in each year up to and including 2010 is calculated at average prices of the previous year. Growth from 2010 onwards is calculated at average prices of 2010. Volume series are only additive for the most recent periods, i.e. annual data for 2010 onwards and quarterly data for quarter one 2011 onwards.

    Common pitfalls in interpreting series: Very few statistical revisions arise as a result of ‘errors’ in the popular sense of the word. All estimates, by definition, are subject to statistical ‘error’ but in this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques or the incorporation of new information which allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable ‘errors’ such as human or system failures and such mistakes are made quite clear when they do occur.

    Coherence. Household Final Consumption Expenditure estimates published in Consumer Trends are a component of the GDP expenditure approach. However, the preliminary estimate for GDP is produced based on the GDP output approach. Historic experience shows that the output approach provides the best timely approach to measuring GDP growth. GDP growth according to the expenditure and income approaches is therefore brought into line with that recorded by output.

  5. Further information. Further Quarterly National Accounts, Quarterly Sector Accounts and Financial Accounts tables are available in the United Kingdom Economic Accounts.

    Details of the policy governing the release of new data are available from the press office.

  6. The ONS compliance plan can be found on the ONS website.

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  8. Code of practice.  National Statistics are produced to high professional standards set out in the UK Statistics Authority's Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

  9. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Statistical contacts

Name Phone Department Email
David Matthewson +44 (0)1633 455612 Office for National Statistics consumer.trends@on.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
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