3. Data sources

The quarterly and annual estimates of household final consumption expenditure (HHFCE) at current and previous year prices are built up commodity by commodity from a variety of independent sources. Each component series within HHFCE is individually seasonally adjusted in current price and volume terms.

The main sources of data used to compile HHFCE estimates are the Retail Sales Inquiry (RSI) and the Living Costs and Food Survey (LCF). Further detail, including the strengths and weaknesses of source data, are considered in HHFCE sources (PDF, 171KB).

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4. Categories of expenditure (COICOP)

In the consumer trends release, household final consumption expenditure (HHFCE) estimates are categorised according to international classification of individual consumption by purpose (COICOP) standards. More information on COICOP classification can be found in Classification of household consumption headings (PDF, 134KB) and from the UN Statistics Division.

The categories with COICOP codes are as follows:

  • 01 Food and non-alcoholic beverages

  • 02 Alcoholic beverages, tobacco and narcotics

  • 03 Clothing and footwear

  • 04 Housing, water, electricity, gas and other fuels

  • 05 Furnishings, household equipment and routine household maintenance

  • 06 Health

  • 07 Transport

  • 08 Communication

  • 09 Recreation and culture

  • 10 Education

  • 11 Restaurants and hotels

  • 12 Miscellaneous goods and services

Tables are also presented for durable goods, semi-durable goods, non-durable goods and services using COICOP divisions.

Each table has six variants, denoted by a suffix:

  • CN for current prices, not seasonally adjusted

  • CS for current prices, seasonally adjusted

  • KN for chained volumes, not seasonally adjusted

  • KS for chained volumes, seasonally adjusted

  • DN for implied deflators, not seasonally adjusted

  • DS for implied deflators, seasonally adjusted

Implied deflators are an indirect measure of inflation and are presented in the consumer trends briefing.

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5. Volume series and annual chain-linking

The consumer trends release provides volume measures of household final consumption expenditure (HHFCE) estimates. These chained volume measures (CVMs) allow users to identify changes in expenditure on a good (or service) resulting from a change in the quantity purchased, rather than a change in the price of that good (or service).

Since the Quarter 2 (Apr to June) 2003 edition of consumer trends, volume measure estimates (.KN and .KS tables) have been produced by a process called annual chain-linking. This method is used to ensure changes in the structure of the economy are reflected in statistics of growth as early as possible.

Annual chain-linking uses a reference year in which current price series and the corresponding volume measures are equal in pounds sterling (or take the value 100 in index number form). The current reference year is 2018. Although the use of chain-linking produces more accurate growth rates, there is a loss of additivity (components no longer sum to totals) for annual estimates before 2018 and Quarter 1 (Jan to Mar) 2019 for quarters.

More information on annual chain-linking can be found in Definitions and conventions for UK HHFCE.

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6. Revisions analysis

An analysis of revisions to the main household expenditure series – growth rates of total expenditure at current prices and in chained volume terms – appears at the end of the consumer trends statistical bulletin.

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7. Blue book 2021: Improvements impacting household expenditure

Removal of historic link factors and improvements to household expenditure exhaustiveness

In the early 2000s, the Living Costs and Food Survey (LCF) and Annual Business Survey (ABS) went through significant changes, so link factors were introduced to remove structural breaks in the historical estimates. With more recent survey estimates having been collected, these link factors are no longer required. Blue Book 2021 implements the removal of these adjustments, whereby data prior to the early 2000s are modified to align to current levels.

This has led to a reduction in national accounts balancing adjustments and improved alignment for the expenditure approach to GDP, leading to revisions to Household Final Consumption Expenditure (HHFCE) on various classification of individual consumption by purpose (COICOP). To achieve improved exhaustiveness of HHFCE, this publication includes uplifts to account for diary fatigue in the LCF and ABS-sourced retail sales by non-retail businesses.

COICOPs affected include (but are not limited to) Telephone Equipment (COICOP 08.2), Other Recreational Items and equipment, gardens and pets (09.3), Newspapers, books and stationery (09.5), Canteens (11.1.2) and Personal Effects (12.3).

Additionally, there have been methods changes to estimates of household spending on machine and remote gambling (COICOP 09.4.3), and maintenance and repair of major durables. (COICOP 09.2.3)

Financial Services Survey Improvements

Improvements have been made to the quality of estimates for financial services using information from the Financial Services Survey (FSS), including the output and intermediate consumption of other financial institutions and financial auxiliaries. This in turn has led to improved estimates of the HHFCE of these financial services, which primarily impacts and increases the consumption Financial Services other than FISIM (COICOP 12.6.2) considerably throughout the time series.

A separate article has been written by ONS with further details on FSS methods changes

Clothing and Telecoms Deflators

Enhancements have been made to the Consumer Price Inflation (CPI) deflator used for Clothing Garments (COICOP 03.1.2) and Telephone Services (COICOP 08.3) as it was found that the inflation over time of these COICOPs were underestimated. The impacts of this revision can be observed in the Chain Volume Measure (CVM) estimates of these COICOPs.

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8. Consistency with other releases

The household final consumption expenditure (HHFCE) estimates in the consumer trends release are consistent with those appearing at Tables E1 to E4 of the quarterly national accounts statistical bulletin for the same period.

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9. Household expenditure estimates work programme

This section outlines some of the main outputs and responsibilities of the Office for National Statistics (ONS) HH Delivery and Development Branches in producing household final consumption expenditure (HHFCE) estimates.

It also summarises what work is underway within the ONS to further develop and improve the outputs to address existing limitations and also prepare for future changes (including the implementation of European statistical requirements). This will help users understand the limitations of the currently published estimates but also highlight developments that will improve the estimates. As progress is made with the improvements listed here, we will provide updates and share information on the extent of planned revisions.

Main outputs and responsibilities for household final consumption expenditure

Primary objectives of HH Delivery and Development teams in producing household expenditure estimates

HHFCE is part of national accounts. As such, the team’s responsibilities include:

  • processing of HHFCE estimates to be included in the quarterly gross domestic product (GDP) releases

  • providing supply and use balanced HHFCE estimates for the annual Blue Book; a description of the supply and use process can be found in the input–output supply and use tables

  • reviewing methodology in household expenditure for national accounts to ensure a robust set of estimates

  • publishing consumer trends and HHFCE estimates, presenting a comprehensive set of estimates of household final consumption quarterly, in line with the national accounts schedule

  • producing estimates that conform to the European System of Accounts 2010 (ESA 2010) classification of individual consumption by purpose (COICOP)

  • producing and delivering HHFCE data to Eurostat – this delivery is required to comply with European legislation

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