Consumer trends, UK: January to March 2019

Household final consumption expenditure (HHFCE) for the UK, as a measure of economic growth. Includes all spending on goods and services by members of UK households.

This is the latest release. View previous releases

This is an accredited national statistic.

Contact:
Email Vera Ruddock

Release date:
28 June 2019

Next release:
30 September 2019

1. Main points

  • In Quarter 1 (Jan to Mar) 2019, household spending (adjusted for inflation) grew by 0.6% compared with Quarter 4 (Oct to Dec) 2018.

  • The largest contribution to growth was in miscellaneous goods and services, which increased by 2.9% compared with Quarter 4 2018.

  • Household spending grew by 1.9% in Quarter 1 2019, when compared with Quarter 1 2018.

  • Current price spending increased by 0.7% in Quarter 1 2019 compared with Quarter 4 2018.

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2. Things you need to know about this release

The quarterly Consumer trends data are typically published around 90 days after the end of the quarter.

Unless otherwise stated all figures are chained volume measure, seasonally adjusted.

The data are consistent with Blue Book 2018.

Household final consumption expenditure (HHFCE) includes spending on goods and services except for: buying or extending a house, investment in valuables (for example, paintings and antiques) or purchasing second-hand goods. Explanations for these exceptions and the related concepts are available in Consumer trends guidance and methodology.

Household expenditure is used in the national accounts to measure the contribution of households to economic growth and accounts for about 60% of the expenditure measure of gross domestic product (GDP). There are two measures:

  • current prices – also known as nominal, cash or value series are expressed in terms of the prices of the time period being estimated

  • chained volume measure – this measure removes the effects of inflation

The estimate of HHFCE where net tourism expenditure is included is called the UK national estimate. When net tourism is excluded, this produces the aggregate total UK domestic expenditure. Lower-level analyses in this bulletin are based on the domestic concept. This is discussed in greater detail in Definitions and conventions for UK HHFCE (Word, 58KB).

Time series data for Consumer trends are also available.

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3. Household spending (adjusted for inflation) grew by 0.6% in Quarter 1 2019

In Quarter 1 (Jan to Mar) 2019, the chained volume measure of household spending increased by 0.6%. The current price value of household spending increased by 0.7% compared with Quarter 4 (Oct to Dec) 2018. The Bank of England inflation report (May 2019) suggested one reason household consumption may be resilient to uncertainty is that "individuals" confidence about their personal financial situation has remained much stronger than that about the general economic situation’. Figure 1 shows the levels of current price and volume spending from Quarter 1 1997 onwards.

In Quarter 1 2019, the value of household spending in current prices increased by 3.5% on the same quarter in 2018. Over the same period, the volume measure of household spending increased by 1.9%.

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4. Main contributors to domestic top-level growth

Domestic growth in consumer spending in Quarter 1 (Jan to Mar) 2019 was 0.44%. Figure 2 shows the main contributions to this growth were miscellaneous goods and services, and clothing and footwear, which contributed 0.39% and 0.09% respectively. This was partially offset by restaurants and hotels, which contributed negative 0.22%, followed by furnishings, household equipment and routine maintenance of the house, with a contribution of negative 0.02%.

These negative contributions are consistent with the Agents’ summary of business conditions and results from the Decision Maker Panel survey, Quarter 1 2019 (PDF, 805KB) which reported that “Demand for furniture and household appliances slowed (…)” and “spending on essential items held up. For example, supermarket contacts reported better-than-expected food sales, possibly reflecting lower spending on restaurant dining”.

The 0.39% contribution from miscellaneous goods and services was due to its 2.9% quarter-on-quarter growth. Within that category, the growth was driven mainly by insurance, as shown in Figure 3, which grew by 22.9% quarter-on-quarter, contributing 0.29% to total domestic expenditure growth.

The second-largest contributor (at 0.09%) was clothing and footwear, with a 1.7% quarter-on-quarter growth. According to the British Retail Consortium, amongst the overall slowdown seen in retail sales in February and March 2019, clothing was one of the few categories where purchases went up, “thanks to more favourable weather”.

At the most detailed level we record, Table 1 shows the areas that displayed the highest growth in the latest quarter.

Table 2 shows the areas that displayed the largest decline in Quarter 1 2019.

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5. Household final consumption expenditure revisions and upcoming changes for Quarter 1 (Jan to Mar) 2019

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.

The open period for this publication, in line with GDP, is Quarter 1 (Jan to Mar) 2019, which means that there are no revisions to prior data.

The next release of Consumer trends (Quarter 2 (Apr to June) 2019) will make changes to the whole data series (as part of the annual Blue Book cycle). An article with indicative impacts of Blue Book 2019 changes on current price and chained volume measure estimates of GDP was published on 27 June 2019.

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7. Quality and methodology

Consumer trends guidance offers fuller details regarding this publication.

We have published a Quality and Methodology Information report for this statistical bulletin and details on changes to estimates and methodology in Blue Book 2018.

The Consumer trends Quality and Methodology Information report contains important information on:

  • the strengths and limitations of the data and how it compares with related data

  • uses and users of the data

  • how the output was created

  • the quality of the output including the accuracy of the data.

Full information on the Classification of Individual Consumption by Purpose (COICOP) classification system can be found on the United Nations Statistics Division website.

Quality of the estimates

Household expenditure volume series are chain-linked annually. Estimates in this Consumer trends bulletin are now based on 2016 price structures; that is, the chained volume measure estimate in 2016 equals the current price value of expenditure in 2016.

Growth in each year up to and including 2016 is calculated at average prices of the previous year. Growth from 2016 onwards is calculated at average prices of 2016. Volume series are only additive for the most recent periods; that is, annual data for 2016 onwards and quarterly data for Quarter 1 (Jan to Mar) 2018 onwards.

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 that 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 clear when they do occur.

Coherence

Household final consumption expenditure estimates published in Consumer trends are a component of the gross domestic product (GDP) expenditure approach. The GDP estimates contain data from three different approaches (output, expenditure and income approach). In the UK, the estimates of the three approaches are balanced to produce the best estimate of GDP.

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Contact details for this Statistical bulletin

Vera Ruddock
consumer.trends@ons.gov.uk
Telephone: +44 (0)1633 455864