UK gross domestic product (GDP) in volume terms was estimated to have increased by 0.4% in Quarter 1 (Jan to Mar) 2016, unrevised from the second estimate of GDP published on 26 May 2016. This is the 13th consecutive quarter of positive growth since Quarter 1 2013.
Since Quarter 1 2015, revisions to GDP quarterly volume growths are small - with a 0.2 percentage point downward revision to Quarter 1 2015 and Quarter 2 (Apr to June) 2015 partially being offset by a 0.1 percentage point upward revision to Quarter 4 (Oct to Dec) 2015.
Between 2014 and 2015, GDP in volume terms increased by 2.2%, revised down 0.1 percentage points from the previous estimate. Between Quarter 1 2015 and Quarter 1 2016, GDP in volume terms increased by 2.0%, unrevised from the previously published estimate.
GDP decreased by 6.3% from the peak in Quarter 1 2008 to the trough in Quarter 2 2009, a little deeper than previously estimated. Having regained its pre-downturn peak in Quarter 3 2013 (one quarter later than previously published), GDP in Quarter 1 2016 is currently 7.0% above its pre-downturn peak.
GDP per head in volume terms was estimated to have increased by 0.3% between Quarter 4 2015 and Quarter 1 2016. Between 2014 and 2015, GDP per head increased by 1.4%.
GDP in current prices increased by 1.0% between Quarter 4 2015 and Quarter 1 2016, revised up 0.3 percentage points from the previously published estimate.
The households and non-profit institutions serving households saving ratio was estimated to be 5.9% in Quarter 1 2016 compared with 5.8% in Quarter 4 2015. In 2015, the saving ratio was estimated to be 6.1%.
Real households disposable income increased by 2.0% between Quarter 4 2015 and Quarter 1 2016. In 2015 real households disposable income increased by 3.5%.
Estimates in this bulletin are consistent with our annual national accounts Blue Book 2016 publication, to be published on 29 July 2016. The last base year and reference year for the chained volume estimates have both moved from 2012 to 2013.Back to table of contents
Gross domestic product (GDP) growth is the main indicator of economic performance. There are 3 approaches used to measure GDP.
Gross value added (GVA) is the sum of goods and services produced within the economy less the value of goods and services used up in the production process (intermediate consumption). The output approach measures GVA at a detailed industry level before aggregating to produce an estimate for the whole economy. GDP (as measured by the output approach) can then be calculated by adding taxes and subtracting subsidies (both only available at whole economy level) to this estimate of total GVA (more information on creating the preliminary estimate of GDP is available on our methods and sources page).
The income approach measures income generated by production in the form of gross operating surplus (profits), compensation of employees (income from employment) and mixed income (self-employment income) for the whole economy.
The expenditure approach is the sum of all final expenditures within the economy, that is, all expenditure on goods and services that are not used up or transformed in the production process, that is, final consumption (not intermediate) for the whole economy.
The third estimate of GDP is based on revised output data, together with updated data from expenditure and income components. In the quarterly national accounts, the output GVA and GDP estimates are balanced with the equivalent income and expenditure approaches to produce headline estimates of GVA and GDP. Further information on all 3 approaches to measuring GDP can be found in the short guide to national accounts.
All data in this bulletin are seasonally adjusted estimates and have had the effect of price changes removed (in other words, the data are deflated), with the exception of income data which are only available in current prices. For further information regarding non-seasonally adjusted data, please refer to the UK economic accounts. It can be downloaded directly from the UKEA dataset and on the UKEA main aggregates reference table.
Growth for GDP and its components is given between different periods. Latest year-on-previous-year gives the annual growth between one calendar year and the previous. Latest quarter-on-previous-quarter growth gives growth between one quarter and the quarter immediately before it. Latest quarter-on-corresponding-quarter-of-previous-year shows the growth between one quarter and the same quarter a year ago.
In line with national accounts revisions policy, the earliest period open for revision in this release is the start date of each series.Back to table of contents
The Quarterly National Accounts are typically published around 90 days after the end of the quarter. At this stage the data content of this estimate from the output measure of gross domestic product (GDP) has risen to around 91% of the total required for the final output-based estimate. There is also around 90% data content available to produce estimates of GDP from the expenditure approach and around 70% data content from the income approach.Back to table of contents
The national accounts are drawn together using data from many different sources. This ensures that the national accounts are comprehensive and provide different perspectives on the economy, for example sales by retailers and purchases by households. One source of information is from business surveys which use information provided directly from UK businesses. These data are subject to many layers of vigorous quality assurance by highly trained personnel, from clarity and confirmation of individual unit data direct from the business contact to scrutiny of data at the macro level. Other sources of data include other government departments and administrative data, including Value Added Tax (VAT) data from HM Revenue and Customs (HMRC) which are subject to quality checks and challenge from ONS. By comparing and contrasting these different sources, the national accounts produce a single picture of the economy which is consistent, coherent and fully integrated.
The production and publication of each gross domestic product (GDP) release is managed by a highly skilled team with a strong emphasis on statistical, analytical and economic debate throughout the production process to publish the headline GDP estimate and components. Although a limited audience have access to GDP data ahead of publication, those involved in the process are selected to ensure each GDP balance achieves a rigorous statistical and economic challenge. A “balancing meeting” is held during each production round where presentations assess GDP and its components against a swathe of external indicators and a focus on GDP headline components. This is attended by senior managers within ONS who challenge the data to ensure consistency and plausibility of the GDP balance. We recognise the importance of transparency and have recently introduced an additional section in our background notes where the balancing adjustments applied - size and the components targeted - are now published.
Accompanying each quarterly and annual production cycle, external quality assurers with particular areas of expertise are invited to challenge and report on the statistical and economic coherence of the headline national account and component dataset. Current assessors include HM Treasury, Bank of England, National Institute of Economic and Social Research, HMRC and Tax Administration Research Centre. Drawing on their personal experience, expertise and subject knowledge, the external quality assurors work in a personal capacity to challenge the synergy of the dataset from a full range of views - from producers, data compilers and from users of the statistics - before final sign-off.
Unlike many short-term indicators published by ONS, there is no simple way of measuring the accuracy of GDP. All estimates, by definition, are subject to statistical uncertainty and for many well-established statistics we measure and publish the sampling error and non-sampling error associated with the estimate, using this as an indicator of accuracy. Since sampling is typically done to determine the characteristics of a whole population, the difference between the sample and population values is considered a sampling error. Non-sampling errors are a result of deviations from the true value that are not a function of the sample chosen, including various systematic errors and any other errors that are not due to sampling. The estimate of GDP, however, is currently constructed from a wide variety of data sources, some of which are not based on random samples or do not have published sampling and non-sampling errors available and as such it is very difficult to measure both error aspects and their impact on GDP. While development work continues in this area, like all other G7 national statistical institutes, we don't publish a measure of the sampling error/non-sampling error associated with GDP.
One dimension of measuring accuracy is reliability, which is measured using evidence from analyses of revisions to assess the closeness of early estimates to subsequently estimated values. Many users try to minimise the impact of uncertainty through using the historical experience of revisions as a basis for estimating how confident they are in early releases and predicting how far and in what direction the early release might be revised. Revisions are an inevitable consequence of the trade-off between timeliness and accuracy. The estimate is subject to revisions as more data become available, but between the preliminary and third estimates of GDP, revisions are typically small (around 0.1 to 0.2 percentage points), with the frequency of upward and downward revisions broadly equal. Many different approaches can be used to summarise revisions; the Validation and Quality Assurance section in the Quality and Methodology Information paper analyse the mean average revision and the mean absolute revision for GDP estimates over data publication iterations. In addition to this analysis, Section 14 of the Revisions to GDP and components in Blue Books 2014 and 2015 article updates the metrics used to test revisions performance in order to answer the question “Is GDP biased?”
Headline GDP components and GDP per head
Table 1: Economic indicators for the UK, Quarter 1 (Jan to Mar) 2014 to Quarter 1 2016
|UK, Quarter 1 (Jan to Mar) 2016|
|Household saving ratio||Real household disposable income||Current market prices||Chained volume measure||GDP per head|
|Source: Office for National Statistics|
|1. Percentage change on previous quarter|
|1. Q1 is Quarter 1 (Jan to Mar).|
|2. Q2 is Quarter 2 ( Apr to June).|
|3. Q3 is Quarter 3 ( July to Sept).|
|4. Q4 is Quarter 4 (Oct to Dec).|
Download this table Table 1: Economic indicators for the UK, Quarter 1 (Jan to Mar) 2014 to Quarter 1 2016.xls (29.2 kB)
Figure 1 shows the annual levels of gross domestic product (GDP) over the last 67 years. It shows the steady economic growth in the UK from the mid 1990s through to 2008 when the UK suffered an economic downturn.
Figure 2 shows growths for the chained volume measure of GDP between 1949 and 2015.
This can be compared with previous economic downturns in the early 1980s and early 1990s, which saw lower levels of impact on GDP. In the early 1990s downturn, GDP decreased 2.0% from the peak in Quarter 2 (Apr to June) 1990 to the trough in Quarter 3 (July to Sept) 1991. In the early 1980s downturn, GDP decreased by 5.4% from the peak in Quarter 2 1979 to the trough in Quarter 1 (Jan to Mar) 1981.
From Quarter 3 2009, growth continued to be erratic, with several quarters between 2010 and 2012 recording broadly flat or declining GDP growth. This 2-year period coincided with special events (for example severe winter weather in Quarter 4 (Oct to Dec) 2010 and the Diamond Jubilee in Quarter 2 2012) that are likely to have affected growth both adversely and positively. Since 2013, GDP has grown steadily, with the economy exceeding pre-downturn peak levels in Quarter 3 2013.
GDP growth in Quarter 1 2016 has slowed marginally to 0.4% which is just below the average quarterly growth of 0.6% since 2013 when GDP growth became more established. Between Quarter 1 2015 and Quarter 1 2016 GDP has grown by 2.0%. GDP is currently 7.0% above its pre-downturn peak and has been growing for 13 consecutive quarters.Back to table of contents
Table AA contains output component growth rates and contributions to growth rates back to Quarter 1 (Jan to Mar) 2014.
Only 1 of the 4 main output industrial groupings within gross domestic product (GDP) showed an increase in Quarter 1 (Jan to Mar) 2016 compared with Quarter 4 (Oct to Dec) 2015, with services showing an increase, agriculture remaining flat and production and construction falling in this period. Within production, 2 of the 4 components increased and 2 components decreased, which resulted in overall negative growth in total production.
Production output decreased by 0.2% in Quarter 1 2016 compared with Quarter 4 2015, revised up 0.2 percentage point from the previously published estimate. Within the production sub-industries, output from mining and quarrying, including oil and gas extraction, decreased by 2.2%; manufacturing (the largest component of production) decreased by 0.2% (Figure 3), while electricity, gas, steam and air conditioning supply industries increased by 0.7%, and water supply and sewerage increased by 2.4%.
When comparing Quarter 1 2016 with Quarter 1 2015, production output increased by 0.3%, revised up 0.2 percentage points from the previously published estimate. Mining and quarrying, including oil and gas extraction, increased by 6.0%, and water supply and sewerage increased by 7.1%. Manufacturing fell by 1.0% between these periods while the electricity, gas, steam and air conditioning supply industries decreased by 2.5%.
Construction output decreased by 0.3% in Quarter 1 2016, revised up 0.7 percentage points from the previously published estimate. Construction output increased by 0.2% between Quarter 1 2015 and Quarter 1 2016, revised up 2.0 percentage points from the previously published estimate.
The service industries increased by 0.6% in Quarter 1 2016 (Figure 4), unrevised from the previous estimate, marking the 13th consecutive quarter of positive growth. This follows a 0.9% increase in Quarter 4 2015.
Output of the distribution, hotels and catering industries increased by 1.4 per cent in Quarter 1 2016, this follows an increase of 1.5 per cent in Quarter 4 2015.
Output of the transport, storage and communications industries was flat in Quarter 1 2016, this follows an increase of 1.2 per cent in Quarter 4 2015.
Business services and finance industries increased by 0.7 per cent in Quarter 1 2016, this follows an increase of 0.7 per cent in Quarter 4 2015.
Output of the government and other services industries increased by 0.3 per cent in Quarter 1 2016, this follows an increase of 0.6 per cent in Quarter 4 2015.
Further detail on the service industries’ lower level components can be found in the Index of Services statistical bulletin published on 30 June 2016.
Gross value added (GVA) excluding oil and gas extraction increased by 0.5% in Quarter 1 2016 following a 0.7% increase in Quarter 4 2015.
Figure 5 shows the path of GDP and its headline industries (this excludes agriculture, and includes manufacturing which is a sub-component of production) relative to their level of output achieved in Quarter 1 2008.
Industries have shown differing trends following the recent economic downturn. The construction, manufacturing and production industries were more acutely affected by the deterioration in economic conditions, with the respective outputs falling by 17.1%, 12.2% and 10.5% respectively between Quarter 1 2008 and Quarter 2 (Apr to June) 2009. In contrast, output in the service industries fell by 4.6% from its peak to trough.
Production activity began to grow again in 2010, and the manufacturing and the construction industries showed particular strength – neither industry sustained this growth. Production output fell between 2011 and 2013, falling below levels seen at the height of the downturn in 2009. Construction output also fell sharply in 2012, but started growing again in 2013. Construction output in 2015 as a whole was 4.2% higher than 2014, but much lower than the rate of growth between 2013 and 2014 (8.0%). In Quarter 1 2016 construction output contracted by 0.3% on a quarter on quarter basis, but grew by 0.2% on a quarter a year ago basis. Although there has been growth across all major components of GDP since 2013, the service industries remain the largest and steadiest contributor to overall economic growth, and are the only headline industries in which output has exceeded pre-downturn levels.
Figure 6 shows the average compound quarterly growth rate experienced over the 5 years prior to the economic downturn in 2008 to 2009, the average growth rate experienced between Quarter 3 2009 and Quarter 2 (Apr to June) 2014 (5 years following the downturn), and the current quarterly growth rate observed in the most recent period (Quarter 1 2016). Compound average growth is the rate at which a series would have increased or decreased if it had grown or fallen at a steady rate over a number of periods. This allows the composition of growth in the recent economic recovery to be compared to the long run average.
The UK experienced slower average compound GDP growth in the 5 years following the economic downturn compared with the 5 years prior: this is also true for the service industries. Figure 5 shows that in Quarter 1 2016, the service industries were the only sector which outperformed its post-downturn average rate of growth. While the service industries grew in Quarter 1 2016 the production, manufacturing and construction sectors experienced contractions of 0.2%, 0.2% and 0.3% respectively.
It should be noted that the third column, which shows the current quarterly growth rate, is based on only 1 data point. Consequently users should use caution when making direct comparisons with the long run averages.
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Table AB contains expenditure component growth rates and contribution to growth rates back to Quarter 1 (Jan to Mar) 2014.
Total domestic expenditure (the sum of all expenditure by UK residents on goods and services that are not used up or transformed in a productive process) increased by 0.3% in Quarter 1 2016. Annually, between 2014 and 2015 total domestic expenditure increased by 2.5%.
The new method for imputed rental introduced in Blue Book 2016 had a substantial impact on calendar year household consumption growth; however this is shown to not significantly alter the broad quarterly path of Household Final Consumption Expenditure (HHFCE). Further detail is provided in the article Impact of methods changes to the national accounts and sector & financial accounts, Q1 1997 to Q1 2016, published on 30 June 2016.
HHFCE increased by 0.7% in Quarter 1 2016, and has increased for 5 consecutive quarters (Figure 7). When compared with the same quarter a year ago, HHFCE has been rising each quarter since Quarter 4 (Oct to Dec) 2011, and was 2.8% higher in Quarter 1 2016 than in the same period a year ago. Between 2014 and 2015, HHFCE increased by 2.6%.
Figure 8 shows the contribution of different categories of goods and services to quarter on same quarter of previous year growth in UK HHFCE. Growth has remained positive since Quarter 3 (July to Sept) 2011 and is shown to have been broad-based across both goods and services. While durable and semi durable goods and services were the predominant drivers of growth in recent periods, the contribution of non durable goods has been positive in the last 5 quarters. In Quarter 1 2016, consumption of non-durables contributed 0.3 percentage points. Non-durable goods include items which can only be consumed or used once; good examples of these are food products.
Government final consumption expenditure increased by 0.5% in Quarter 1 2016, following a 0.2% increase in Quarter 4 2015. Between Quarter 1 2015 and Quarter 1 2016, government final consumption expenditure increased by 1.9%. Between 2014 and 2015, government final consumption expenditure increased by 1.4%.
Non-profit institutions serving households’ (NPISH) final consumption expenditure increased by 1.7% in Quarter 1 2016, following a 0.5% increase in Quarter 4 2015. Between Quarter 1 2015 and Quarter 1 2016, NPISH final consumption expenditure increased by 2.2%. Annually, NPISH final consumption expenditure increased by 1.5% between 2014 and 2015.
Blue Book 2016 contained only a small number of methodological changes to the components of Gross Fixed Capital Formation (GFCF) and are mainly attributed to revised dwelling, agriculture and own account construction data.
In Quarter 1 2016, GFCF was estimated to have decreased by 0.1% (Figure 9). Between Quarter 1 2015 and Quarter 1 2016, GFCF increased by 0.7%. GFCF increased by 3.3% between 2014 and 2015. More detail on GFCF, including a breakdown of the GFCF components, can be found in the Business investment statistical bulletin published on 30 June 2016.
Business investment was estimated to have decreased by 0.6% in Quarter 1 2016 and decreased by 0.8% between Quarter 1 2015 and Quarter 1 2016. Annually, business investment increased by 5.0% between 2014 and 2015.
Including the alignment adjustment, the level of inventories increased by £1.2 billion in Quarter 1 2016, following an increase of £2.9 billion in Quarter 4 2015. Excluding the alignment adjustment, the level of inventories increased by £2.9 billion in Quarter 1 2016, following an increase of £1.5 billion in Quarter 4 2015. More information on the alignment adjustment can be found in the Balancing GDP section within the background notes of this release.
The trade balance deficit widened from £13.4 billion in Quarter 4 2015 to £14.1 billion in Quarter 1 2016 (Figure 10). The trade position reflects exports minus imports. Following a 3.2% increase in Quarter 4 2015, exports decreased by 0.4% in the latest quarter, while imports increased by 0.1% in Quarter 1 2016 following a 2.5% increase in Quarter 4 2015.
Exports of goods increased by 1.9% in Quarter 1 2016, due mainly to an increase in exports of oil, chemicals and cars. Exports of services decreased by 3.4% in Quarter 1 2016, due to a fall in other business services. In Quarter 1 2016, imports of goods increased by 0.6%, due to an increase in imports of machinery. Imports of services decreased by 1.4% in Quarter 1 2016, due to a fall in import of travel services.
Between 2014 and 2015, exports increased by 4.8%, with increases in exports of services and exports of goods, while imports increased by 5.8%; reflecting an increase in both imports of goods and services.
The Blue Book 2016 changes to exports and imports result in revisions to the contribution of net trade to GDP. Table AB shows the contribution of net trade and suggests that net trade continues to switch between periods of both supporting gross domestic product (GDP) growth and acting as a drag on GDP growth.
Figure 11 shows a breakdown of the trade components and their contribution to GDP growth from Quarter 1 2008 to Quarter 1 2016. In the most recent quarter the trade balance made a positive contribution of 0.1 percentage points to GDP growth. The series indicates that in the previous 4 quarters the UK trade balance has made a negative contribution to GDP growth. When comparing Quarter 1 2016 with Quarter 1 2015, export of goods increased by 3.2% and contributed 0.6 percentage points to GDP growth. This outweighed the 1.6% growth in the import of goods, which contributed -0.4 percentage points to GDP growth.
Figure 12 shows the quarterly contribution of the expenditure components to the growth of GDP in chained volume measures. For Quarter 1 2016, the largest positive contribution to GDP came from household final consumption expenditure, which contributed 0.4 percentage points. General government final consumption expenditure contributed 0.1 percentage points. The negative contributions to GDP came from net trade, which contributed a negative 0.2 percentage points and gross capital formation, which contributed a negative 0.2 percentage points.
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Table AD contains implied deflator component growth rates back to Quarter 1 (Jan to Mar) 2014.
The gross domestic product (GDP) implied deflator at market prices for Quarter 1 (Jan to Mar) 2016 is 0.1% above the same quarter of 2015 (Figure 13). The GDP implied deflator is calculated by dividing current price (nominal) GDP by chained volume (real) GDP and multiplying by 100 to convert to an index. It is not used in the calculation of GDP; the deflators for expenditure components, which are the basis for the implied GDP deflator, are used to calculate nominal GDP, not real GDP.
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Table AC contains income component growth rates back to Quarter 1 (Jan to Mar) 2014.
Gross domestic product (GDP) at current market prices increased by 1.0% in Quarter 1 2016, following a 0.5% increase in Quarter 4 (Oct to Dec) 2015. GDP at current market prices increased by 2.1% when compared with Quarter 1 2015. In 2015, GDP at current market prices increased by 2.6%.
Within this bulletin the calculation of wages and salaries estimates, which forms part of Compensation of Employees, has been revised in years following supply and use balancing (“the quarterly tail”). This change makes better use of existing data sources and realigns wages and salaries estimates with the European System of Accounts 2010 definition of the concept which requires measurement of both ‘cash’ and ‘in kind’ employee income. Previously non-seasonally adjusted wages and salaries were calculated as total economy employees (sourced from the Labour Force Survey) multiplied by total economy average earnings including bonuses (sourced from Average Weekly Earnings). The new method calculates the public and private sectors separately by making use of data specific to both sectors. More detail can be found in the second part of the ‘Quarterly round changes’ section in the Background notes.
Compensation of employees – which includes both wages and salaries, and employers’ social contributions, increased by 0.9% in Quarter 1 2016, following an increase of 0.4% in Quarter 4 2015 (Figure 14). Between Quarter 1 2015 and Quarter 1 2016, compensation of employees increased by 3.5%. In 2015, compensation of employees increased by 3.3%.
The gross operating surplus of corporations (GOS) (effectively the profits of companies operating within the UK), including the alignment adjustment, increased by 3.7% in Quarter 1 2016 compared with the previous quarter; Quarter 4 2015 was flat (Figure 15). Between 2014 and 2015, the GOS of corporations increased by 0.2%. More information on the alignment adjustment can be found in the Balancing GDP section within the background notes of this release.
Taxes on products and production less subsidies decreased by 1.2% in Quarter 1 2016, following an increase of 2.6% in Quarter 4 2015. Between 2014 and 2015, taxes on products and production less subsidies increased by 2.4%.
Figure 16 shows the contribution made by income components to current price GDP. In Quarter 1 2016, there were positive contributions to GDP from gross operating surplus of corporations which contributed 0.7 percentage points, compensation of employees which contributed 0.4 percentage points and other income which contributed 0.2 percentage points. The only negative contribution to GDP came from taxes on products and production less subsidies which contributed a negative 0.1 percentage points.
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In Quarter 1 (Jan to Mar) 2016 gross domestic product (GDP) per head increased by 0.3% compared with Quarter 4 (Oct to Dec) 2015, revised up 0.1 percentage points from the previously published estimate. GDP per head is now 0.8% above its pre-downturn peak in Quarter 4 2007 (1 quarter earlier than previously published), having surpassed it in Quarter 3 (July to Sept) 2015 (1 quarter later than previously published).
In comparison, GDP exceeded the level of its pre-downturn peak in Quarter 3 2013 (unrevised), and is now 7.0% above its pre-downturn peak (revised from 7.2%; Figure 17).
Between Quarter 1 2015 and Quarter 1 2016, GDP per head increased by 1.3%. Between 2014 and 2015 GDP per head increased by 1.4%, revised from 1.5%.
GDP per head is calculated by dividing GDP in chained volume measures by the latest population estimates and projections. The population estimates used in this release are those published on 23 June 2016 and the population projections used are those published on 29 October 2015.Back to table of contents
In Quarter 1 (Jan to Mar) 2016, the central government, local government, financial corporations and households and non-profit institutions serving households sectors were net borrowers. The public corporations, private non-financial corporations and rest of the world sectors were net lenders (Figure 18).
Compared to the previous quarter, public corporations and private non-financial corporations switched from net borrowers to net lenders. All other sectors remain unchanged.
Table I has further detail.Back to table of contents
The saving ratio for Quarter 1 (Jan to Mar) 2016 was 5.9%, compared with 5.8% in the previous quarter (Figure 19).
This rise in the latest quarter reflects rises in net property income and compensation of employees partially offset by increased taxes on income and wealth and final consumption expenditure.
What is the saving ratio?
The saving ratio estimates the amount of money households and NPISH have available to save (known as gross saving) as a percentage of their total disposable income (known as total available resources). Both can be found in table J3 of this release.
Gross saving estimates the difference between households and NPISH total available resources (mainly wages received, revenue of the self-employed, social benefits and net income such as interest on savings and dividends from shares, but excluding taxes on income and wealth) and their current consumption (expenditure on goods and services).
All of the components that make up gross saving and total available resources, and in fact all sector accounts data apart from real households disposable income (RHDI), are estimated in current prices (CP). These are sometimes known as nominal prices, meaning that they include the effects of price changes.
The saving ratio is published in both non-seasonally adjusted (NSA) and seasonally adjusted (SA) formats with the latter removing seasonal effects to allow comparisons over time. However, the saving ratio can be volatile and is sensitive to even relatively small movements to its components, particularly on a quarterly basis. This is because gross saving is a small difference between 2 numbers. It is therefore often revised at successive publications when new or updated data are included.Back to table of contents
The level of real households and non-profit institutions serving households (NPISH) disposable income increased by 2.0% in Quarter 1 (Jan to Mar) 2016, following a decrease of 0.5% in the previous quarter (Figure 21).
This rise in the latest quarter reflects a rise in net social benefits other than transfers in kind and net property income partially offset by increased taxes on income and wealth.
Figure 22 shows the main components contributing to the quarterly movement of households and NPISH gross disposable income.
What is real households and NPISH disposable income?
There are 2 measures of households and NPISH income, in real terms or in current prices (or nominal as it is often called), and both of these time series can be found in table J2 of this release.
Gross households and NPISH disposable income (GDI) is the estimate of the total amount of money from income that households and NPISH have available from wages received, revenue of the self-employed, social benefits and net income (such as interest on savings and dividends from shares) less taxes on income and wealth. All the components that make up GDI are estimated in current prices.
However, by adjusting GDI to remove the effects of inflation, we are able to estimate another useful measure of disposable income called real disposable income. This is a measure of real purchasing power of households and NPISH incomes, in terms of the physical quantity of goods and services they would be able to purchase. We use the households and NPISH expenditure deflator (which can be found in table J2 of this release) to remove the effects of price inflation.Back to table of contents
Net lending of private non-financial corporations’ was £1.1 billion in Quarter 1 (Jan to Mar) 2016, following net borrowing of £58 million in the previous quarter. This increase to net lending in the latest quarter was due to a rise in gross operating surplus and decreased gross capital formation partially offset by a fall in net property income.
For a more detailed coverage of the sector accounts a new bulletin called Quarterly Sector Accounts is now being released alongside this bulletin covering all institutional sectors.Back to table of contents
The estimates quoted in this international comparison section are the latest available estimates published by the respective bodies (referenced) at the time of preparation of this statistical bulletin and may subsequently have been revised.
All areas included within our international comparison saw positive growth when comparing Quarter 1 (Jan to Mar) 2016 with Quarter 4 (Oct to Dec) 2015 (Figure 22). The European Union (EU28) grew by 0.5%, marking 12 consecutive quarters of positive growth (Table 2). In the same period, the group of Euro Area countries (EA19) grew by 0.6%, revised from 0.5% published in the UK’s Second Estimate. When comparing Quarter 1 2016 with Quarter 1 2015, EA19 grew by 1.7% and the EU28 expanded by 1.8% (Figure 23).
Germany and France saw their gross domestic product (GDP) increase by 0.7% and 0.6%, respectively, between Quarter 4 2015 and Quarter 1 2016; this compares to slower growth rates of 0.3% and 0.4%, respectively, in the previous quarter.
In Quarter 1 2016, the USA’s economy increased by 0.2% and GDP for Japan increased by 0.5%, with the latter following a decrease of 0.4% in the previous quarter. Compared to the same quarter last year, the USA’s GDP increased by 2.0, while Japan’s economy showed flat growth.
The combined GDP for the Group of Seven (G7) countries increased by 0.4% in Quarter 1 2016, revised from 0.3% published in the UK’s Second Estimate. When comparing Quarter 1 2015 with Quarter 1 2016, G7 GDP increased by 1.6% and is now 6.7% above its pre-downturn peak in Quarter 1 2008. Italy is the only G7 country with its GDP still below Quarter 1 2008, at 8.5% below its pre-downturn peak.
Information on the estimates for the USA can be found on the Bureau of Economic Analysis website; information on the estimates for Japan can be found on the Japanese Cabinet Office website. More detailed information for the G7 and the EU countries can be found on the Organisation for Economic Co-operation and Development’s website and Eurostat website, respectively.
Table 2: International GDP quarterly growth rate comparisons for selected economic areas, quarter-on-quarter, Quarter 1 (Jan to Mar) 2016
|Quarter on previous quarter % growth rates, chained volume, seasonally adjusted|
|Source: Office for National Statistics, Organisation for Economic Co-operation and Development, Eurostat, United States Bureau of Economic Analysis, Statistics Japan|
|1. EU28 is the European Union|
|2. EA19 is the eurozone|
|3. G7 is the Group of Seven countries|
|4. Non-UK countries and groupings may show revisions in the back series due to NSI revisions|
Download this table Table 2: International GDP quarterly growth rate comparisons for selected economic areas, quarter-on-quarter, Quarter 1 (Jan to Mar) 2016.xls (30.7 kB)
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GDP and components, previously published on 26 May 2016
Figure 26 shows quarterly revisions between latest and previously published estimates of gross domestic product (GDP). All time periods are open for revision in this release.
Detailed revisions for the 3 GDP approaches
- output revisions are shown in Table AE
- expenditure revisions are shown in Table AF
- income revisions are shown in Table AG
Sector accounts revisions, previously published 31 March 2016
- sector accounts revisions are shown in Table AH
Contact details for this Statistical bulletin
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