1. Deputy Chief Economist
Economic and Microdata Insights
Office for National Statistics
Economic Forum
26 September 2022
Chair – Ed Palmer
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2. Agenda
09:30 – 09:35 Welcome and introduction – Ed Palmer (Chair), Deputy Chief Economist,
Office for National Statistics
09:35 – 09:50 State of the UK Economy – Grant Fitzner, Chief Economist, Office for National
Statistics
09:50 – 10:05 Business energy spending: experimental measures from ONS business surveys,
Chloe Baker and Tom Wickersham, Office for National Statistics
10:05 – 10:20 Alternative measures of underutilisation in the UK labour market – Alex Blinston, Office
for National Statistics
10:20 – 10:40 Q&A
10:40 – 10:45 Closing remarks – Ed Palmer (Chair), Deputy Chief Economist, Office for National
Statistics
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3. Questions can be submitted via the slido app using code #21006.
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4. Chief Economist and Director of
Macroeconomic Statistics and Analysis
@GrantFitzner
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State of the UK Economy
September 2022
Grant Fitzner

5. Monthly GDP volatile as pandemic spend unwinds
Source: ONS – Health volume adjustments dataset
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
Jul 2021 Sep
2021
Nov
2021
Jan
2022
Mar
2022
May
2022
Jul 2022
Percent
and
percentage
points
Contributions to monthly GDP growth
Services Production Construction GDP
Source: Office for National Statistics – GDP monthly estimate
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
Jul 2021 Sep
2021
Nov
2021
Jan
2022
Mar
2022
May
2022
Jul 2022
Per
cent
and
percentage
points
Pandemic contribution to monthly GDP
T&T and Vaccine contribution
GDP growth excl. T&T and Vaccine
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6. UK trade deficit has widened since pandemic,
while sanctions see slump in Russian imports
Source: Office for National Statistics – UK trade statistics
£0
£200
£400
£600
£800
£1,000
£1,200
£1,400
£1,600
£1,800
£2,000
Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22
Total UK goods imports from Russia (£m)
Russian
invasion of
Ukraine begins
UK applies
sanctions on
trade with
Russia
-£70
-£60
-£50
-£40
-£30
-£20
-£10
£0
£10
£20
£30
£40
UK trade balance, 3 month rolling period (£bn)
Trade in services balance
Trade in goods balance (excluding precious metals)
Total trade balance (including precious metals)
Total trade balance (excluding precious metals)
Source: Office for National Statistics – UK trade statistics
Note: Data reported on a despatch not country of origin basis
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7. Food and energy prices are pushing up inflation
Source: Ofgem
-2%
0%
2%
4%
6%
8%
10%
2006 2008 2010 2012 2014 2016 2018 2020 2022
Contributions to CPI annual growth
Energy Food
Other CPI
0
100
200
300
400
500
600
700
800
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Price
index,
Jan
2021
=
100
Gas and Electricity Prices: Forward Delivery
Contracts
Electricity Gas
Source: Office for National Statistics – Consumer Price Inflation
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8. Consumers are cutting back on expenditure,
increasing costs are putting pressure on firms
0% 20% 40% 60% 80%
Using credit more than usual, e.g. credit
cards, loans or overdrafts
Making energy efficiency improvements to
my home
Using my savings
Shopping around more
Cutting back on non-essential journeys in
my vehicle
Spending less on food shopping and
essentials
Using less fuel such as gas or electricity in
my home
Spending less on non-essentials
Proportion of people taking measures in
response to increased cost of living
31 Aug-11 Sep 17-29 Aug
Source: Office for National Statistics – OPN, 17-29 Aug 2022
0% 10% 20% 30% 40% 50%
Business is not considering
raising prices
Other
Not sure
Finance costs
Labour costs
Raw material prices
Energy prices
Reasons for considering price rises
All businesses All size bands excl 0-9
Source: Office for National Statistics – BICS Wave 63
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9. Rising prices and weaker consumer confidence
weighing on retail spending
Source: Office for National Statistics – Retail Sales Index
Source: GfK Consumer Confidence Barometer
60
70
80
90
100
110
120
2019
Jan
2019
Jul
2020
Jan
2020
Jul
2021
Jan
2021
Jul
2022
Jan
2022
Jul
Retail sales value and volumes
Value of retail sales at current prices
Volume of retail sales
-50
-40
-30
-20
-10
0
10
20
2018 2019 2020 2021 2022
Personal financial situation
Last 12 Months Next 12 Months
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10. GDP forecasts downgraded, modest UK downturn expected
93
94
95
96
97
98
99
100
101
102
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Pre-recession
qaurter
=
100
Quarters after pre-recession peak
Profile of UK GDP recession path
1973 Q2 1979 Q4
1990 Q2 2008 Q1
2022 Q3
Source: ONS National Accounts; Bank of England forecasts
Note: Path of the 2020 pandemic recession is now shown
0%
1%
2%
3%
4%
5%
6%
Sep-21 Dec-21 Mar-22 Jun-22
Month of forecast
Real-time average UK GDP forecasts
2022 2023
Source: HM Treasury ‘Forecasts for the UK economy’
Note: Average (mean) of new forecasts received
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11. Summing up
• Food and energy prices have pushed inflation to 40-year
highs, putting pressure on businesses and households
• Energy cap means we may be near the inflation peak
– but higher import prices could weigh
• UK trade balance has been deteriorating since pandemic
• Forecasters are downgrading their UK growth outlook,
with the Bank of England expecting a modest recession
• New tax cuts will increase public sector net borrowing
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12. Economic and Microdata Insights
Office for National Statistics
Business energy
spending:
experimental
measures from ONS
business surveys
Tom Wickersham and
Chloe Baker
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13. Introduction
• Energy spending in Annual Business Survey and Annual
Purchases Survey
• Energy intensity = energy spending as % of total purchases
• Microdata enables detailed analysis
• Data lag is a downside: 2019 for ABS, 2018 for APS
• Relative rankings of industry energy intensity have been quite
stable over time
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14. Electricity, gas, steam and air conditioning supply
was the most energy intensive industry section
Energy intensity by industry section, 2019
Source: Office for National Statistics - Annual Business Survey, 2019
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15. There was wide variation in energy intensity across
detailed industry groups
Energy intensity by industry group, clustered by industry section, 2019
Source: Office for National Statistics - Annual Business Survey, 2019
Manufacture of
clay building
materials
Electric power generation,
transmission and distribution
Sea and
coastal freight
water transport
Passenger
air transport
Fishing
Hotels, pubs,
other
accommodation
Residential care activities
for the elderly and disabled
Freight transport
by road and
removal services
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16. Natural gas was a smaller proportion of energy costs than
either electricity or petrol & diesel across industries
Energy intensity by industry section and energy type, 2018
Source: Office for National Statistics - Annual Purchases Survey, 2018
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17. The smallest businesses were more likely to be highly
energy intensive
Distribution of energy intensity by firm size, 2019 (columns sum to 100% in each size band chart)
Source: Office for National Statistics - Annual Business Survey, 2019
0
5
10
15
20
25
30
35
40
Proportion
of
firms
in
sizeband
(%)
Energy intensity band (%)
Large: 250+ employees
0
5
10
15
20
25
30
35
40
Proportion
of
firms
in
sizeband
(%)
Energy intensity band (%)
Medium: 50-249 employees
0
5
10
15
20
25
30
35
40
Proportion
of
firms
in
sizeband
(%)
Energy intensity band (%)
Small: 10-49 employees
0
5
10
15
20
25
30
35
40
Proportion
of
firms
in
sizeband
(%)
Energy intensity band (%)
Micro: 0-9 employees
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18. Energy intensive industries have different underlying
distributions
Distribution of energy intensity within selected industry divisions, 2019
Source: Office for National Statistics - Annual Business Survey, 2019
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19. Businesses in energy intensive industries are more
likely to have considered raising prices
Proportion of businesses considering raising prices due to energy prices in August 2022 (BICS wave
60), and energy intensity (ABS 2019)
Source: ONS - Business Insights and Conditions Survey, final weighted results of Wave 60; and Annual Business Survey, 2019
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0% 5% 10% 15% 20% 25%
%
businesses
considering
higher
prices
due
to
energy
Energy intensity (%)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0% 2% 4% 6% 8% 10% 12% 14%
%
businesses
considering
higher
prices
due
to
energy
Energy intensity (%)
(excluding land transport outlier)
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20. Production and
manufacturing
industries were more
likely to be energy
intensive with GVA as
the energy intensity
denominator
Energy intensity by industry group:
standard measure with total
purchases denominator; and Gross
Value Added (GVA) denominator,
2019
Source: Office for National Statistics - Annual Business Survey, 2019
0
1
10
100
0 1 10 100
Energy
intensity
with
'GVA'
denominator,
%
(log
scale)
Energy intensity with 'total purchases' denominator, % (log scale)
Production,
manufacturing and
construction
Services
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21. Conclusions
• New, relevant insights despite older data
• All industries have some energy intensive businesses and
subsectors
• Smallest ‘micro’ businesses were more likely to have very high
energy intensity
• Future research could include firm-level linking and net zero
• ONS Business Insights and Conditions Survey, Opinions and
Lifestyle Survey, and real time indicators are more timely
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22. Office for National Statistics
Alternative measures of
underutilisation in the
UK labour market
Alex Blinston
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23. Vacancies have exceeded unemployment in 2022
0
500
1000
1500
2000
2500
3000
2001
Q2
2002
Q2
2003
Q2
2004
Q2
2005
Q2
2006
Q2
2007
Q2
2008
Q2
2009
Q2
2010
Q2
2011
Q2
2012
Q2
2013
Q2
2014
Q2
2015
Q2
2016
Q2
2017
Q2
2018
Q2
2019
Q2
2020
Q2
2021
Q2
2022
Q2
Thousands
All vacancies Unemployed level
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24. Coverage of analysis
 A spectrum of unemployment measures (U-1 to U-6)
 Narrower measures (U-1 and U-2)
 Broader measures (U-4, U-5, and U-6)
 Time-related underemployment
 Industry-level mismatch
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25. All underutilisation measures are at or close to
their lowest recorded rates
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
1993
Q2
1994
Q2
1995
Q2
1996
Q2
1997
Q2
1998
Q2
1999
Q2
2000
Q2
2001
Q2
2002
Q2
2003
Q2
2004
Q2
2005
Q2
2006
Q2
2007
Q2
2008
Q2
2009
Q2
2010
Q2
2011
Q2
2012
Q2
2013
Q2
2014
Q2
2015
Q2
2016
Q2
2017
Q2
2018
Q2
2019
Q2
2020
Q2
2021
Q2
2022
Q2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
1993
Q2
1994
Q2
1995
Q2
1996
Q2
1997
Q2
1998
Q2
1999
Q2
2000
Q2
2001
Q2
2002
Q2
2003
Q2
2004
Q2
2005
Q2
2006
Q2
2007
Q2
2008
Q2
2009
Q2
2010
Q2
2011
Q2
2012
Q2
2013
Q2
2014
Q2
2015
Q2
2016
Q2
2017
Q2
2018
Q2
2019
Q2
2020
Q2
2021
Q2
2022
Q2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
1993
Q2
1994
Q2
1995
Q2
1996
Q2
1997
Q2
1998
Q2
1999
Q2
2000
Q2
2001
Q2
2002
Q2
2003
Q2
2004
Q2
2005
Q2
2006
Q2
2007
Q2
2008
Q2
2009
Q2
2010
Q2
2011
Q2
2012
Q2
2013
Q2
2014
Q2
2015
Q2
2016
Q2
2017
Q2
2018
Q2
2019
Q2
2020
Q2
2021
Q2
2022
Q2
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26. The difference between U-3 and broader measures
are at their lowest recorded rates
0
1
2
3
4
5
6
1993
Q2
1994
Q2
1995
Q2
1996
Q2
1997
Q2
1998
Q2
1999
Q2
2000
Q2
2001
Q2
2002
Q2
2003
Q2
2004
Q2
2005
Q2
2006
Q2
2007
Q2
2008
Q2
2009
Q2
2010
Q2
2011
Q2
2012
Q2
2013
Q2
2014
Q2
2015
Q2
2016
Q2
2017
Q2
2018
Q2
2019
Q2
2020
Q2
2021
Q2
2022
Q2
U-5 minus U-3 U-6 minus U-3
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27. The rate of underutilised hours has declined
sharply over the last year
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2007
Q1
2008
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
2014
Q1
2015
Q1
2016
Q1
2017
Q1
2018
Q1
2019
Q1
2020
Q1
2021
Q1
2022
Q1
Percent
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28. The current level of industry mismatch is
relatively low
0.00
0.05
0.10
0.15
0.20
0.25
0.30 2001
Q2
2002
Q2
2003
Q2
2004
Q2
2005
Q2
2006
Q2
2007
Q2
2008
Q2
2009
Q2
2010
Q2
2011
Q2
2012
Q2
2013
Q2
2014
Q2
2015
Q2
2016
Q2
2017
Q2
2018
Q2
2019
Q2
2020
Q2
2021
Q2
2022
Q2
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29. The upward trend in the size of the UK active
population has been reversed since Q1 2020
25000
27000
29000
31000
33000
35000
37000
1993
Q2
1994
Q2
1995
Q2
1996
Q2
1997
Q2
1998
Q2
1999
Q2
2000
Q2
2001
Q2
2002
Q2
2003
Q2
2004
Q2
2005
Q2
2006
Q2
2007
Q2
2008
Q2
2009
Q2
2010
Q2
2011
Q2
2012
Q2
2013
Q2
2014
Q2
2015
Q2
2016
Q2
2017
Q2
2018
Q2
2019
Q2
2020
Q2
2021
Q2
2022
Q2
Number
of
persons,
thousands
Employment Employment + U-3 Employment + U-5 Employment + U-6
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30. Summary
 Broader measures of labour market availability have fallen to historically
low rates, which provide further evidence of there being relatively little
spare capacity in the labour market.
 There is weaker evidence to support a possible mismatch between
vacancies and unemployment across industries.
 Low rates of underutilisation in the UK labour market predominately reflects
a general shortage of available labour, reflecting in part higher levels of
inactivity since the coronavirus (COVID-19) pandemic.
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31. Related ONS analysis
• Sickness absence in the UK labour market: 2021
• Movements out of work for those aged over 50 years since the start of the coronavirus
pandemic
• Reasons for workers aged over 50 years leaving employment since the start of the
coronavirus pandemic
• Impact of coronavirus on people aged 50 to 70 years and their employment after the
pandemic
• Changing trends and recent shortages in the labour market, UK: 2016 to 2021
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32. Questions can be submitted via the slido app using code #21006.
You can also access slido via the link in the chat box.
Q&A

33. Deputy Chief Economist
Economic and Microdata Insights
Office for National Statistics
Closing remarks
Ed Palmer
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34. Forthcoming ONS economic analysis
• 27 September 2022 – The cost of living, current and upcoming work: September 2022
• 27 September 2022 – Reasons for workers aged over 50 years leaving employment since the start
of the coronavirus pandemic
• 30 September 2022 – Quarterly National Accounts
• 10 October 2022 – Foreign direct investment, experimental UK subnational estimates: October
2022
• 11 October 2022 – Labour Market Theme day
All information on upcoming analysis can be found via the ONS website
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35. Dates for your diary
• 3 October 2022 – National Statistician Launch: Measures of National Well-being consultation
• 10 October 2022 – ONS Economic Forum, Bank of England
• 24 October 2022 – Regional Birmingham Economic Forum
Further details on the above event and any upcoming events will be published at
ons.gov.uk/economicevents
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36. Thank you for attending the
Economic Forum
You can keep up to date on all upcoming events via
ons.gov.uk/economicevents
If you would like to ask a question or provide any feedback, please do so
via economic.engagement@ons.gov.uk