The reporting period for this release covers Quarter 2 (Apr to June) 2016, and therefore includes data in the lead up to and for a short period after the EU referendum. There is very little anecdotal evidence at present to suggest that the referendum has had an impact on gross domestic product (GDP) in Quarter 2 2016. The Index of Services, published alongside this release, covers a full month of data following the EU referendum.
UK GDP in volume terms was estimated to have increased by 0.7% in Quarter 2 2016, revised up 0.1 percentage points from the second estimate of GDP published on 26 August 2016. This is the 14th consecutive quarter of positive growth since Quarter 1 (Jan to Mar) 2013.
Revisions to GDP quarterly volume growths are small compared with the previously published estimate – with a 0.1 percentage point upward revision to Quarter 2 2015 and a 0.1 percentage point downward revision to Quarter 3 (July to Sept) 2015 and no revisions to Quarter 1 2015, Quarter 4 (Oct to Dec) 2015 and Quarter 1 2016.
Between 2014 and 2015, GDP in volume terms increased by 2.2%, unrevised from the previous estimate. Between Quarter 2 2015 and Quarter 2 2016, GDP in volume terms increased by 2.1%, revised down 0.1 percentage points from the previously published estimate.
GDP per head in volume terms was estimated to have increased by 0.5% between Quarter 1 2016 and Quarter 2 2016. Between 2014 and 2015, GDP per head increased by 1.4%.
GDP in current prices increased by 1.5% between Quarter 1 2016 and Quarter 2 2016, revised down 0.1 percentage points from the previously published estimate.
The households and non-profit institutions serving households saving ratio was estimated to be 5.1% in Quarter 2 2016 compared with 5.6% in Quarter 1 2016. In 2015, the saving ratio was estimated to be 6.1%.
Real households disposable income increased by 0.6% in Quarter 2 2016. In 2015 real households disposable income increased by 3.3%.Back to table of contents
From January 2017, we are improving the way we publish economic statistics, with related data grouped together under new "theme" days. This will increase the coherence of our data releases and involve minor changes to the timing of certain publications. For more information see Changes to publication schedule for economic statistics.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 (UKEA). 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 Quarter 1 (Jan to Mar) 2015.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, HM Revenue and Customs 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 that we publish, 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 or 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?”Back to table of contents
Table 1: Economic indicators and GDP per head for the UK, Quarter 2 (Apr to June) 2016
|UK, Quarter 2 (Apr to June) 2016|
|Household saving ratio||Real household disposable income||GDP at current market prices||GDP at chained volume measure||GDP per head|
|Source: Office for National Statistics|
|1. Percentage change on previous quarter|
|2. Q1 is Quarter 1 (Jan to Mar)|
|3. Q2 is Quarter 2 (Apr to June)|
|4. Q3 is Quarter 3 (July to Sept)|
|5. Q4 is Quarter 4 (Oct to Dec)|
Download this table Table 1: Economic indicators and GDP per head for the UK, Quarter 2 (Apr to June) 2016.xls (29.2 kB)
Figure 1 shows quarterly growths and levels for the chained volume measure of gross domestic product (GDP) between Quarter 3 (July to Sept) 2003 and Quarter 2 (Apr to June) 2016.
As seen in Figure 1, GDP in the UK grew steadily during the 2000s until a financial market shock affected UK and global economic growth in 2008 and 2009. Economic growth resumed towards the end of 2009:- the first 2 to 3 years was at a generally slower rate than the period prior to 2008. From the peak in Quarter 1 (Jan to Mar) 2008 to the trough in Quarter 2 2009 GDP decreased by 6.3%. This can be compared to 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 by 2.0% from the peak in Quarter 2 1990 to the trough in Quarter 3 1991. In the early 1980s downturn, GDP decreased by 5.4% from the peak in Quarter 2 1979 to the trough in Quarter 1 1981.
From Quarter 3 2009 growth continued to be erratic, with several quarters between 2010 and 2012 recording broadly flat or declining GDP. 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.
Quarter 2 2016 has shown continued strength with GDP growing by 0.7% compared with the previous quarter and by 2.1% between Quarter 2 2015 and Quarter 2 2016. GDP has now increased for 14 consecutive quarters, breaking a pattern of slow and erratic growth from 2009.Back to table of contents
Only 2 of the 4 main output industrial groupings within gross domestic product (GDP) showed an increase in Quarter 2 (Apr to June) 2016 compared with Quarter 1 (Jan to Mar) 2016, with production and services showing an increase; agriculture and construction decreased during this period. Within production, all 4 of the components increased, which resulted in overall positive growth in total production.
Production output increased by 2.1% in Quarter 2 2016 compared with Quarter 1 2016, unrevised from the previously published estimate. Within the production sub-industries, output from mining and quarrying – (including oil and gas extraction) – increased by 2.8%:- manufacturing (the largest component of production) increased by 1.6% (Figure 2), electricity, gas, steam and air conditioning supply industries increased by 4.6%, and water supply and sewerage increased by 2.1%.
When comparing Quarter 2 2016 with Quarter 2 2015, production output increased by 1.6%, revised down 0.2 percentage points from the previously published estimate. Mining and quarrying – (including oil and gas extraction) – increased by 1.0%, manufacturing rose by 1.0% between these periods, the electricity, gas, steam and air conditioning supply industries increased by 4.4% and water supply and sewerage increased by 5.3%.
Construction output decreased by 0.1% in Quarter 2 2016, revised up 0.6 percentage points from the previously published estimate. Revisions were due to the incorporation of late data and the results of the annual seasonal adjustment review. Construction output increased by 0.4% between Quarter 2 2015 and Quarter 2 2016, revised up 1.8 percentage points from the previously published estimate.
The service industries increased by 0.6% in Quarter 2 2016 (Figure 3), revised up 0.1 percentage points from the previous estimate, marking the 14th consecutive quarter of positive growth. This follows a 0.7% increase in Quarter 1 2016.
Output of the distribution, hotels and catering industries increased by 1.1% in Quarter 2 2016, this follows an increase of 1.4% in Quarter 1 2016.
Output of the transport, storage and communications industries increased by 0.6% in Quarter 2 2016:- this follows flat growth in Quarter 1 2016.
Business services and finance industries increased by 0.6% in Quarter 2 2016, this follows an increase of 0.7% in Quarter 1 2016.
Output of the government and other services industries increased by 0.1% in Quarter 2 2016, this follows an increase of 0.5% in Quarter 1 2016.
Further detail on the service industries’ lower level components can be found in the Index of Services statistical bulletin published on 30 September 2016.
Gross value added (GVA) excluding oil and gas extraction increased by 0.7% in Quarter 2 2016, following a 0.4% increase in Quarter 1 2016.
Figure 4 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 output falling from peak to trough by 17.1%, 12.2% and 10.5% respectively. In contrast, output in the services industry only fell by 4.6%.
Activity began to grow again in 2010, with the manufacturing and the construction industries showing particular strength – but neither industry sustained this growth. Production output fell in both 2011 and 2012, falling below levels seen at the height of the downturn in 2009. Construction output also fell sharply in 2012, with output falling close to its 2009 trough after further contraction in Quarter 1 2013. Since that period construction output has improved and surpassed its pre-downturn peak in Quarter 1 2016. Despite a contraction in Quarter 2 2016 of 0.1%, construction output remains above pre-downturn levels, while the services industries remain the largest and steadiest contributors to overall economic growth.
Figure 5 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 2 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 slightly slower average compound GDP growth in the 5 years following the economic downturn compared with the 5 years prior: this is also true of the services industry. Figure 5 shows that in Quarter 2 2016 only the construction industry performed at a rate below the post-downturn average rate of growth.
It should be noted that the third column, which shows the current quarterly growth rate, is based on only one data point. Consequently, users should use caution when making direct comparisons with the long run averages.
Table AA contains output component growth rates and contributions to growth rates back to Quarter 1 2014.Back to table of contents
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 1.4% in Quarter 2 (Apr to June) 2016. Annually, between 2014 and 2015 total domestic expenditure increased by 2.5%.
Household final consumption expenditure (HHFCE) increased by 0.9% in Quarter 2 2016, and has increased for 6 consecutive quarters (Figure 6). When compared with the same quarter a year ago, HHFCE has been rising each quarter since Quarter 4 (Oct to Dec) 2011, and was 3.0% higher in Quarter 2 2016 than in the same period a year ago. Between 2014 and 2015, HHFCE increased by 2.6%.
Figure 7 shows the contribution of different categories of goods and services to quarter on same quarter a year ago growth in UK household final consumption expenditure. 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 were the predominant driver of growth in recent periods, the contribution of non durable goods has been positive in the last 6 quarters. In the latest quarter, consumption of non-durables contributed 0.4% of the annual growth rate in HHFCE, up from 0.2% in the previous quarter. Non-durable goods include items which can only be consumed or used once; a good example of these is food products.
Government final consumption expenditure was flat in Quarter 2 2016, following a 0.4% increase in Quarter 1 (Jan to Mar) 2016. Between Quarter 2 2015 and Quarter 2 2016, government final consumption expenditure increased by 1.1%. Between 2014 and 2015, government final consumption expenditure increased by 1.5%.
Non-profit institutions serving households’ (NPISH) final consumption expenditure increased by 1.7% in Quarter 2 2016, following a 1.8% increase in Quarter 1 2016. Between Quarter 2 2015 and Quarter 2 2016, NPISH final consumption expenditure increased by 2.3%. Annually, NPISH final consumption expenditure increased by 0.8% between 2014 and 2015.
In Quarter 2 2016, gross fixed capital formation (GFCF) was estimated to have increased by 1.6% (Figure 8). Between Quarter 2 2015 and Quarter 2 2016, GFCF increased by 1.0%. GFCF increased by 3.4% 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 September 2016.
Business investment was estimated to have increased by 1.0% in Quarter 2 2016 and decreased by 0.8% between Quarter 2 2015 and Quarter 2 2016. Annually, business investment increased by 5.1% between 2014 and 2015.
Including the alignment adjustment, the level of inventories increased by £3.0 billion in Quarter 2 2016, following an increase of £1.2 billion in Quarter 1 2016. Excluding the alignment adjustment, the level of inventories increased by £1.1 billion in Quarter 2 2016, following an increase of £2.9 billion in Quarter 1 2016. 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 £12.2 billion in Quarter 1 2016 to £15.7 billion in Quarter 2 2016 (Figure 9). The trade position reflects exports minus imports. Following a 0.1% increase in Quarter 1 2016, exports decreased by 1.0% in the latest quarter, while imports increased by 1.3% in Quarter 2 2016 following a 0.2% increase in Quarter 1 2016.
Exports of goods decreased by 1.1% in Quarter 2 2016, due mainly to a decrease in exports of oil. Exports of services decreased by 0.9% in Quarter 2 2016, due to a fall in travel, insurance and telecommunications services:- this was partially offset by an increase in other business services. In Quarter 2 2016, imports of goods increased by 1.6%, due to an increase in imports of oil, aircraft and ships. Imports of services increased by 0.5% in Quarter 2 2016, due to a rise in government and transport services, partially offset by a fall in import of travel services.
Between 2014 and 2015, exports increased by 4.5%, with increases in both exports of services and exports of goods, while imports increased by 5.4%, reflecting an increase in both imports of goods and services.
Figure 10 shows a breakdown of the trade components and their contribution to GDP growth from Quarter 1 2008 to Quarter 2 2016. The series indicates that in the latest quarter, the UK trade balance has made a negative contribution to GDP growth. When comparing Quarter 2 2015 with Quarter 2 2016, exports of goods decreased by 2.2%, taking 0.4 percentage points off GDP growth. This was partially offset by 11.6% growth in exports of services, which contributed 1.3 percentage points to GDP growth.
Table AB contains expenditure component growth rates and contribution to growth rates back to Quarter 1 2014.
Figure 11 shows the quarterly contribution of the expenditure components to the growth of GDP in chained volume measures. For Quarter 2 2016, the largest positive contributions to GDP came from gross capital formation, which contributed 0.9 percentage points and Household final consumption expenditure contributed 0.5 percentage points, whilst net trade contributed a negative 0.8 percentage points.
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The gross domestic product (GDP) implied deflator at market prices for Quarter 2 (Apr to June) 2016 is 1.0% above the same quarter of 2015 (Figure 12). 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.
Table AD contains implied deflator component growth rates back to Quarter 1 (Jan to Mar) 2014.
Back to table of contents
Gross domestic product (GDP) at current market prices increased by 1.5% in Quarter 2 (Apr to June) 2016, following a 1.2% increase in Quarter 1 (Jan to Mar) 2016. GDP at current market prices increased by 3.1% when compared with Quarter 2 2015. In 2015, GDP at current market prices increased by 2.6%.
Compensation of employees – which includes both wages and salaries, and employers’ social contributions, increased by 1.9% in Quarter 2 2016, following an increase of 0.3% in Quarter 1 2016 (Figure 13). Between Quarter 2 2015 and Quarter 2 2016, compensation of employees increased by 3.8%. In 2015, compensation of employees increased by 3.4%.
The gross operating surplus (GOS) of corporations (effectively the profits of companies operating within the UK), including the alignment adjustment, decreased by 0.3% in Quarter 2 2016 compared with the previous quarter, while Quarter 1 2016 increased by 5.8% (Figure 14). Between 2014 and 2015, the GOS of corporations increased by 0.3%. 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 increased by 1.2% in Quarter 2 2016, following a decrease of 0.7% in Quarter 1 2016. Between 2014 and 2015, taxes on products and production less subsidies increased by 2.8%.
Table AC contains income component growth rates and contribution to growth rates back to Quarter 1 2014.
Figure 15 shows the contribution made by income components to current price GDP. In Quarter 2 2016, compensation of employees contributed a positive 0.9 percentage points, other income contributed a positive 0.4 percentage points and taxes on products and production less subsidies also contributed positive 0.1 percentage points. This was slightly offset by a negative contribution from gross operating surplus of corporations of 0.1 percentage points.
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In Quarter 2 (Apr to June) 2016, gross domestic product (GDP) per head increased by 0.5%, compared with Quarter 1 (Jan to Mar) 2016; this was revised from 0.4% published at the Second Estimate. GDP per head is now 1.3% above the pre-downturn peak in Quarter 1 2008, having surpassed it in Quarter 3 (July to Sept) 2015.
In comparison, GDP exceeded the level of its pre-downturn peak in Quarter 3 2013 (unrevised), and is now 7.6% above its pre-downturn peak (Figure 16).
Between Quarter 2 2015 and Quarter 2 2016, GDP per head increased by 1.4%, revised down 0.1 percentage points. Between 2014 and 2015, GDP per head also increased by an unrevised 1.4%, compared with a growth of 2.3% between 2013 and 2014.
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 2 (Apr to June) 2016, the central government, local government, public corporations, financial corporations and households and non-profit institutions serving households sectors were net borrowers. The private non-financial corporations and rest of the world sectors were net lenders (Figure 17).
Compared to the previous quarter, public corporations switched from net lenders to net borrowers. All other sectors remain unchanged.
Table I has further detail.Back to table of contents
The saving ratio for Quarter 2 2016 was 5.1%, compared with 5.6% in the previous quarter (Figure 18).
The fall in the saving ratio primarily reflects a rise in final consumption expenditure and a fall in net property income, offset by increased compensation of employees, a fall in taxes on income and a rise in gross operating surplus and mixed income.
What is the saving ratio?
The saving ratio estimates the amount of money households and non-profit institutions serving households (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 NPISH disposable income increased by 0.6% in Quarter 2 (Apr to June) 2016, following an increase of 0.8% in the previous quarter (Figure 20).
This rise in the latest quarter primarily reflects a rises in wages and salaries and gross operating surplus and mixed income, decreased taxes on income and wealth, partially offset by decreased net property income.
Figure 21 shows the main components contributing to the quarterly movement of households and NPISH gross 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 £4.7 billion in Quarter 2 2016, following net lending of £5.7 billion in the previous quarter. This decrease to net lending in the latest quarter was due to a rise in gross capital formation with other smaller changes, partially offset by a rise 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.
From March 2017, the sector accounts content contained within this bulletin will move to its new home within the Quarterly Sector Accounts bulletin.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.
The combined GDP for the Group of Seven (G7) countries increased by 0.2% when comparing Quarter 2 (Apr to June) 2016 with Quarter 1 (Jan to Mar) 2016, following growth of 0.4% in the previous quarter. 4 of the G7 countries saw positive growth, France and Italy experienced flat growth, and Canada was the only country whose economy contracted (Table 2). The European Union (EU28) grew by 0.4% (Figure 22), marking 13 consecutive quarters of positive growth, and in the same period, the group of Euro Area countries (EA19) grew by 0.3%. In Quarter 2 2016 Japan’s flat growth was revised up 0.2 percentage points from the previously published quarter on quarter growth.
When comparing Quarter 2 2016 with Quarter 2 2015, EA19 and EU28 expanded by 1.6% and 1.8%, respectively (Figure 23). Overall G7 GDP increased by 1.3%; this has been revised up 0.1 percentage points since the last publication.
G7 GDP is now 7.1% above the pre-economic downturn peak in Quarter 1 2008 (Figure 24). Italy is the only G7 country with its GDP still below Quarter 1 2008, at 8.4% below its pre-downturn peak, and Canada has the strongest recovery in the G7, at 12.2% above the downturn peak (Figure 25).
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) 2014 to Quarter 2 (Apr to Jun) 2016
|Sources: 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|
|5. Q1 is Quarter 1 (Jan to Mar)|
|6. Q2 is Quarter 2 (Apr to June)|
|7. Q3 is Quarter 3 (July to Sept)|
|8. Q4 is Quarter 4 (Oct to Dec)|
Download this table Table 2: International GDP quarterly growth rate comparisons for selected economic areas, quarter-on-quarter, Quarter 1 (Jan to Mar) 2014 to Quarter 2 (Apr to Jun) 2016.xls (29.7 kB)
Figure 24 and figure 25 show GDP for the UK, EU, EA, G7, Germany, France, Italy, Japan, Canada and USA, all indexed to Quarter 1 2008 (the pre-downturn peak in the UK) to allow comparison of each since that period.
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Gross national income (GNI) is an important statistic within the National Accounts, and it is used in the calculation of a member state’s contribution to the European Union (EU) budget. GNI is equal to GDP plus net property income from abroad. In September 2014, the UK National Accounts moved from being compiled and published on an European System of Accounts (ESA) 1995 basis to the ESA 2010 basis. However, the calculation of each Member States' contribution to the EU budget is currently still based on the ESA 1995 definition of GNI. Table 3 shows how the September 2016 ESA 2010 GNI estimates could be mapped on to an ESA 1995 basis using the transition items defined by Eurostat (the statistical office of the European Union). Further information about the total Blue Book 2016 ESA 1995 based GNI reservations are presented in the September 2016 ESA 2010 GNI for the UK mapped to ESA 1995 published on September 30 2016.
Table 3: ESA 2010 GNI for the UK mapped to ESA 1995
|current prices £ billion|
|Gross national income (ESA2010) 30 September 20161||1,592.6||1,647.9||1,672.9||1,729.2||1,798.7||1,833.8|
|Less total impact of differences in definitions between ESA2010 and ESA95 on GNI (ESA2010 minus ESA95)||31.5||31.9||36.0||36.7||37.9||39.4|
|Gross national income (ESA95)||1,561.1||1,616.0||1,636.8||1,692.5||1,760.8||1,794.4|
|Source: Office for National Statistics|
|1. Figures expressed to the nearest £0.1 billion|
Download this table Table 3: ESA 2010 GNI for the UK mapped to ESA 1995.xls (28.2 kB)
GDP and components, previously published on 26 August 2016
Figure 26 shows quarterly revisions between latest and previously published estimates of gross domestic product (GDP). Quarter 1 (Jan to Mar) 2015 is the first quarter 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 and income revisions are shown in Table AG
Sector accounts revisions, previously published 30 June 2016
- Sector accounts revisions are shown in Table AH
Contact details for this Statistical bulletin
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