impact of changes in blue book and pink books 2013 andrew walton, phillip davies, marilyn thomas 27...
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Impact of changes in Blue Book and Pink Books 2013
Andrew Walton, Phillip Davies, Marilyn Thomas
27 June 2013
Summary
• Introduction• Main changes to methods• Impact on GDP• Expenditure components• Sector and Financial Accounts• Balance of Payments
Introduction
• Published today• QNA• UKEA• Quarterly BoP• Slimline Business Investment• Several supporting articles
• Tomorrow• Index of Services• Productivity
Introduction
• 31 July• Blue Book• Pink Book• Supply and Use Tables• Full Business Investment• BoP geography
Changes in Blue Book 2013
• Reference year 2010• Quality improvements to Supply and Use
Tables• Private Non-Financial Corporation’s
(PNFC’s) profits• Rental estimates, and• Imputed rental• Gross Operating Surplus (GoS) for own
account software• Investment in artistic originals
Changes in Blue Book 2013
• Alignment of the National Accounts with Public Sector Finances
• Measurement of bonds liabilities, and• Measurement of UK Private Non-Financial
Corporations’ (PNFCs) overseas deposits and loans
• Gross Fixed Capital Formation, and• Changes in inventories systems• Improved estimation of some industries• Seasonal adjustment of construction output
Impact on GDP - nominal
Impact on GDP - nominal
• Levels raised by a little over 1% on average by methods changes• This amounts to £20.8 billion in 2012
• Switch between 2008 and 2009 – new quarterly profits• 2008 growth revised up 0.4 pp• 2009 growth revised down 0.4 pp
Impact on GDP – real
Impact on GDP – real
• Average growth since 1997 revised down by 0.1% a year
• Bigger changes in individual years• 2001 and 2009 down• 2004 and 2005 up
• GFCF is biggest impact• But profile of HMRC profits also
important in 2008 and 2009
Impact on real GDP – downturn
• Peak to trough is now 7.2%• Previously published as 6.4%, 7.1% and
6.3%
• Duration of downturn is now 5-6 quarters• Initially 6 quarters, revised to 5 quarters
in BB2011• Q2 and Q3 2009 flat (actually down £16
mn)
Impact on real GDP – downturn
Impact on real GDP – recovery
• 46% of loss in output during recession has been recovered
• Previously estimated as 59%• Revision largely due to increased ‘peak to
trough’• But slight downward revision to path of recovery
(3.5% above trough revised from 3.9%)
• No longer two consecutives quarters of negative growth in 2011/12 (to 1 dp)
• Q1 2012 revised from -0.1% to zero (a fall of £250mn to a fall of £26mn)
Impact on real GDP – recovery
Household expenditure
• Separate article published today• Number of improved methods and data
sources• Imputed rental (+£30 bn in 2011)• Repairs and maintenance (-£13bn)• Supply and use balancing (+£3bn)• Financial services (-£3bn)• Internet subscriptions (-£1bn)• Smuggling (+ less than half a billion)
• Total revision in 2011 is +£17bn
Gross Fixed Capital Formation
• Key improvements to deflation and seasonal adjustment
• improved construction of the asset, sector and industry series:
• asset, industry and sector series constructed directly
• improved deflation and chain linking methodology: • at more detailed asset, sector and industry level
• full set of Producer Price Indices (PPI) deflators used
• Business Spending on Capital Items Survey is now used, for weights
• improved seasonal adjustment: • seasonal adjustment on acquisitions and disposals
separately
Gross Fixed Capital Formation
• Artistic originals (+£2bn in 2012)
• Own account software mark-up (+£2bn)
• Overall impact• Growth revised from +1.5% to +0.5% in
2012• Not a consistent pattern but reduces
growth on average
Change in Inventories
• More detailed chain linking and seasonal adjustment• Acquisitions and disposals• Lower level industry and asset
• New deflators still being quality assured
Sector and Financial Accounts
• Financial Account impacted by methods improvements
• Alignment with Public Sector Finances• Bonds• PNFCs overseas loans and deposits
• Further details in articles
• Saving Ratio• 4.2% in latest quarter, lowest quarterly saving ratio since
2009q1 (3.4%)
• 6.7% in 2012 and 2011
• Real household disposable income (RHDI) • Fall of 1.7% in latest quarter, largest fall since 1990 q2 (1.7%)
• Rise of 1.4% in 2012 (Fell 1.2% in 2011)
Any Questions?
Sector & Financial Accounts
2013 Q1
Phillip Davies
Summary
• Financial Account methods changes• Sector Financial Accounts Key Indicators• Links to Methods Papers & Publications (to
follow!)
Financial Account
• Methodological Changeso Bondso Overseas deposits and loanso Public Sector Finance alignment
Bonds
ONS undertook a review of the Bonds liability methodology which recommended:• Converting bond liabilities estimates from nominal to market values,
using a weighted index of bond prices, so that they move into line with international (SNA2003/ESA 95) requirements
• Using aggregate data from the Bank of England Balance Sheet Survey of Banks and Building Societies to measure MFIs bond liabilities
• Improving the processing and sectorising of data on quoted UK bonds collected from the London Stock Exchange
• Using data from the London Stock Exchange as a source for measuring the bond liabilities of insurance companies and pension funds
• Treating the Rest of the World bond assets as the residual difference between total bond liabilities and assets, due to a lack of data coverage for the sector
In addition to these actions, the bond review recommended a change in the way bond estimates are presented in the financial account
• Now presented in a combined F.3325-6
Bonds continued
• 2003 onwards but presentation back to 1997• Financial account (flows) and balance sheet
(levels)• Impacted PNFCs bond liabilities
Old New
Overseas deposits and loans
• Changes to estimates of UK deposits with and loans from overseas banks
• Previously overstating overseas deposits for PNFCs and understating for OFIs
• Split moved from 80% PNFCs & 10% OFI to growth in line with the sectors UK bank deposits and loans
• Affects F.229 & F.419 across all sectors• 2003 onwards• Impacts mainly to liabilities of PNFCs & OFIs• Financial account and balance sheet
SFA Key Indicators
• Saving Ratio4.2% in latest quarter
Lowest quarterly saving ratio since 2009q1 (3.4%)
6.7% in 2012 and 2011
• Real household disposable income (RHDI) Fall of 1.7% in latest quarter
Largest fall since 1990 q2 (1.7%)
Rise of 1.4% in 2012 (Fell 1.2% in 2011)
Publications & Articles
• Bonds• Overseas deposits and loans• PSH
Further details?
• Bonds & Overseas deposits:
Harry Duff [email protected]• Public Sector
David Mathewson [email protected]
• UKEA
Phillip Davies or Michael Rizzo [email protected] [email protected]
Balance of Payments
• Also impacted by changes to Financial Account• Improvements to debt securities
(bonds) liabilities• Improvements to PNFCs overseas
loans and deposits (and OFIs overseas loans and deposits)
• Further details in articles
Questions?