SlideShare ONS Economic Forum Slidepack - 13 November 2023

ONS Economic Forum
Chair – Sumit Dey-Chowdhury
@ONSfocus #ONSEconForum slido #11806
Deputy Director
Economic and Microdata Insights
Office for National Statistics

Agenda
09:30am – 09:35am Welcome and introduction – Sumit Dey-Chowdhury, Deputy Director, Economic and
Microdata Insights, Office for National Statistics
09:35am – 09:40am Labour Force Survey quality – David Freeman, Head of Labour Market and Households,
09:40am – 09:55am State of the UK economy – Grant Fitzner, Chief Economist, Office for National Statistics
09:55am – 10:05am Gross Domestic Product and economic welfare – Graeme Chamberlin, Office for National
Statistics
10:05am – 10:15am Insights from the Annual Survey of Hours and Earnings – Lualhati Santiago, Office for
National Statistics
10:15am – 10:25am Questions and answers
10:25am – 10:30am Closing remarks – Sumit Dey-Chowdhury, Deputy Director, Economic and Microdata
Insights, Office for National Statistics

Questions can be submitted via the slido app using code #11806.
You can also access slido via the link in the chat box.

Labour Force Survey
(LFS) Quality
David Freeman
Head of Labour Market and Households

The Labour Force Survey has seen declining responses,
particularly since the pandemic, with knock-on impacts on
statistical quality
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Mar-May…
May-Jul
2019
Jul-Sep
2019
Sep-Nov
2019
Nov-Jan
2020
Jan-Mar
2020
Mar-May…
May-Jul
2020
Jul-Sep
2020
Sep-Nov
2020
Nov-Jan
2021
Jan-Mar
2021
Mar-May…
May-Jul
2021
Jul-Sep
2021
Sep-Nov
2021
Nov-Jan
2022
Jan-Mar
2022
Mar-May…
May-Jul
2022
Jul-Sep
2022
Sep-Nov
2022
Nov-Jan
2023
Jan-Mar
2023
Mar-May…
May-Jul
2023
+/-
Confidence Interval on Headline Labour Market Rates
Employment
Unemployment
Inactivity
0
20,000
40,000
60,000
80,000
100,000
120,000
LFS Achieved Person Interviews

What we’ve done and what we have planned
• Publications for October and November:
• Vast majority of LFS-based labour market statistics and LFS microdata suspended for October and November pub'ns
• Table X10 published, setting out adjusted experimental headline levels and rates by age and, from November, region
and country
• Adjustments use HMRC PAYE RTI and Claimant Count data to proxy movements in employment and unemployment,
respectively
• November 2 – Set out planned improvements to LFS across both collection and methodology
• Assess impacts ahead of December publication with a view to potentially resuming publication of LFS statistics
• Replacing the LFS with the Transformed Labour Force Survey – aiming for March 2024
Collection
• Returning to face-to-face interviews for waves 1 and 2
• Additional household recontacting – revisiting a further
1,200 households per week
• Prioritising responses from households containing
people aged 16-24
• Reintroduction of the sample boost
Methodology
• Incorporating the latest population estimates into the
LFS weighting – testing ongoing
• Improving the non-response bias adjustment
• Using model-based approaches to provide
corroborating evidence and test improvements

State of the UK Economy
November 2023
Grant Fitzner
Chief Economist

UK GDP growth continues to be subdued
Contributions to monthly GDP growth, Sept 2022 – Sept 2023
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
Sep
2022
Oct
2022
Nov
2022
Dec
2022
Jan
2023
Feb
2023
Mar
2023
Apr
2023
May
2023
Jun
2023
Jul
2023
Aug
2023
Sep
2023
Services Production Construction GDP
Source: ONS – Monthly GDP
%
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
GDP, quarter on quarter growth, 2021 Q3 – 2023 Q2
%
Source: ONS – Quarterly GDP

Labour market softens, pay growth remains strong
0
0.2
0.4
0.6
0.8
1
1.2
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23
Vacancy-unemployment ratio, January 2015 - August 2023
Source: ONS – Job Vacancies, Labour Force Survey Source: ONS Labour Markets; Bank of England – DMP survey; HMRC
Annual Earnings Growth, Various Measures, January 2022 – October 2023
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Jan
22
Feb
22
Mar
22
Apr
22
May
22
Jun
22
Jul
22
Aug
22
Sep
22
Oct
22
Nov
22
Dec
22
Jan
23
Feb
23
Mar
23
Apr
23
May
23
Jun
23
Jul
23
Aug
23
Sep
23
Oct
23
AWE - Private Total DMP - Realised pay growth
RTI - Mean Monthly Pay

Headline inflation looks likely to fall further
Source: ONS – Services PPI; Consumer Price Inflation
0
5
10
15
20
25
Feb-21 Jun-21 Oct-21 Feb-22 Jun-22 Oct-22 Feb-23 Jun-23
p/Kwh
Wholesale gas prices/energy cap relationship, February
2023- August 2023
Forward Delivery Contracts - Weekly
Average
wholesale observation period
Source: Ofgem

Source: OBR, ONS – Public Sector Finance Source: OBR, Institute for Fiscal Studies
0
20
40
60
80
100
120
140
160
Apr
2023
May
2023
Jun
2023
Jul
2023
Aug
2023
Sep
2023
Oct
2023
Nov
2023
Dec
2023
Jan
2024
Feb
2024
Mar
2024
Net borrowing - ONS provisional estimate
Net borrowing - OBR forecast
Cumulative public sector net borrowing, outturn & forecast, 2023/24
0
20
40
60
80
100
120
140
2023-24 2024-25 2025-26 2026-27 2027-28
OBR - March Citi/IFS - October
Comparison of public sector borrowing
forecasts
Borrowing below forecast, but outlook challenging
£bn
£bn

Latest Bank forecasts more pessimistic
0%
2%
4%
6%
8%
10%
12%
2021 Q1 2022 Q1 2023 Q1 2024 Q1 2025 Q1 2026 Q1
CPI, outturn and projections, 2021Q1 - 2026Q4
August 2023 forecast
November 2023
forecast
Source: Bank of England – Monetary Policy Report Source: Bank of England – Monetary Policy Report
99
100
101
102
103
2023Q1 2023Q4 2024Q3 2025Q2 2026Q1 2026Q4
GDP forecasts, cumulative change, 2023Q1 - 2026Q4
August 2023 forecast November 2023 forecast

-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2021
Oct
2021
Nov
2021
Dec
2022
Jan
2022
Feb
2022
Mar
2022
Apr
2022
May
2022
Jun
2022
Jul
2022
Aug
2022
Sep
2022
Oct
2022
Nov
2022
Dec
2023
Jan
2023
Feb
2023
Mar
2023
Apr
2023
May
2023
Jun
2023
Jul
2023
Aug
2023
Sep
House purchase Remortgaging Other
Source: Bank of England
0
5
10
15
20
25
30
35
40
45
50
Source: ONS – Opinion and Lifestyle Survey
Mortgage approvals, UK, Oct 21 – Sep 23 Adults reporting finding it very or somewhat difficult affording rent
or mortgage payments, Mar 2022 – Oct 2023
%
Higher rates still feeding through to the economy

Key points
• Latest data suggest a subdued picture for UK economic activity,
with high monthly volatility but modest growth over the past year
• Inflation continues to fall, helped by lower gas and electricity
charges and easing manufacturing and services producer prices
• Though there may be some fiscal space this year, recent forecasts
suggest that the outlook is relatively challenging
• The Bank of England's monetary tightening cycle has not yet fully
fed through to the real economy

Gross Domestic
Product and economic
welfare
Graeme Chamberlin

Introduction
• Real Gross Domestic Product (GDP): a measure of the volume of total output produced
in a particular country.
• Its limitations as a measure of welfare or wellbeing are widely acknowledged.
• Present two measures – which the ONS already publish in some form – which adjust GDP
to give a greater focus on welfare:
• Real Gross Domestic Income (GDI): a measure of the purchasing power of GDP.
• Real Income: a measure that is linked to the level of sustainable consumption.

Real GDI
• Q. How do we derive volume (real) measures of GDP?
• A. The Geary Method – deflate each component by its own price index
• The terms of trade – the ratio of a country’s export prices to import prices (PX/ PM).
• Changes in the t-o-t have no effect on real GDP – but is this true for welfare?
• Real GDI = Real GDP + T
• Terms of trade effect (T): deflate exports with the imports price index (PM).
• Terms of trade effect: T = X(1/PM – 1/PX)
• Real GDI reflects the purchasing power of a nation’s output (Command-basis GDP).

Real GDP versus Real GDI
Real GDP and Real GDI growth (%) Differences in growth and the terms of trade

Real Income
• A measure of income that is related to current and future consumption opportunities:
Gross Domestic Product (GDP)
Net Domestic Product (NDP)
Net National Income (NNI)
Net National Disposable Income (NNDI)
Real Income
1. Exclude consumption of fixed capital (depreciation)
2. Add net income from the Rest of the World…
… and net transfers
3. Use the consumption deflator to value
NNDI in consumption units

Real Income: depreciation and net income
effects
Depreciation (%GDP) Net income and transfers with ROW (%GDP)

Real income: deflators and real GDP comparison
Implied deflators (1987 = 100) Real GDP – Real Income (% Real GDP)

Real GDP, Real GDI and Real Income
Index
(1987
=
100)

Future developments
• SNA 2025: considering a proposal to extend net measures of economic activity to also
include the depletion of natural resources.
• UK inclusive income: Estimates of economic progress which encompass a broader range
of economic activities and assets than gross domestic product (GDP) does.
• UK inclusive income - Office for National Statistics (ons.gov.uk)
• Any thoughts or questions then please contact us:
• graeme.chamberlin@ons.gov.uk
• sumit.dey-chowdhury@ons.gov.uk

Insights from the Annual
Survey of Hours and
Earnings
Lualhati Santiago

Why look at ASHE?
 Lots of interest in domestic inflationary pressures, given the
tight labour market.
 ASHE is our highest quality comprehensive survey on earnings.
It is based on a sample of 1% of employees in the UK. The
achieved sample for 2023 was 156,000.
 We can look at changes in the level and composition of earnings
and distributional impacts, including earnings inequality.

All sources suggest strong earnings inflation
Sources: ONS Annual Survey of Hours and Earnings, ONS Monthly Wages and
Salaries Survey, HMRC Pay As You Earn Real Time Information.
Note: ASHE data for 2023 is provisional. AWE (mean) is a three-monthly average.
Total pay annual growth rates for ASHE (UK), PAYE
RTI (UK) and AWE (GB), April 2019 and April 2023
%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Apr 2019 Apr 2023
ASHE (median) RTI (median) RTI (mean) AWE (mean)

Distribution of earnings continues shifting rightwards
Distribution of hourly earnings (excluding overtime) for all employees, UK, 2018, 2019, 2022 and 2023
Source: ONS - Annual Survey of Hours and Earnings.
Note: Data for 2023 are provisional.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2018 2019 2022 2023
%

Earnings gap between the highest and lowest earners narrowed in
the last decade, with a record low in low-pay jobs in 2023
Proportion of high- and low-paid employee jobs for
hourly pay, UK, 1997 to 2023
0
5
10
15
20
25
30
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
%
Low-paid jobs (hourly) High-paid jobs (hourly)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2006
2007
2008
2009
2010
2011
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
P90/P10 ratio for median gross hourly earnings
(excluding overtime), UK, April 1997 to 2023

Median weekly earnings for full-time employees
grew, particularly in lower-paying occupations
Percentage change in average gross median weekly earnings for full-time
employees by major occupational groups, UK, April 2022 to April 2023
0.0 2.0 4.0 6.0 8.0 10.0
Elementary occupations
Process plant and machine operatives
Sales and customer service occupations
Caring leisure and other service
occupations
Skilled trades occupations
Administrative and secretarial
occupations
Associate professional and technical
occupations
Professional occupations
Managers directors and senior officials
Percentage change in average gross median weekly earnings for full-
time employees by major occupational groups and P10, P50 & P90
percentiles, UK, April 2022 to April 2023
0.0 2.0 4.0 6.0 8.0 10.0 12.0
Elementary occupations
Process plant and machine operatives
Sales and customer service occupations
Caring leisure and other service…
Skilled trades occupations
Administrative and secretarial occupations
Associate professional and technical…
Managers directors and senior officials
%
P10 P50 P90
%

The gender pay gap fell in the last decade, but is
flat since 2019 and larger for women aged 40+
Gender pay gap for median gross hourly earnings
(excluding overtime), UK, April 1997 to 2023
Gender pay gap for median gross hourly earnings
(excluding overtime) by age, UK, 2023
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18 to 21 22 to 29 30 to 39 40 to 49 50 to 59 60 +
%
2023
-10
-5
0
5
10
15
20
25
30
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
%
All Full-time Part-time

£0
£5
£10
£15
£20
£25
£30
0% 10% 20% 30% 40% 50% 60% 70% 80%
£
per
hour
(ex.
overtime)
Share of Employees who are women
Managers, directors and senior
officials
22-29
30-39
40-49
50-59
Fewer women aged 40+ are in occupations at an age where pay
typically increases for those occupations
Median gross hourly earnings (excluding overtime) by the percent of full-time employees in each group
that are women, for age and occupation group, UK, 2023

Key takeaways from ASHE 2023
 Distribution of earnings continues shifting rightwards.
 Earnings gap between the highest and lowest earners
has narrowed in the last decade, and 2023 saw a record low
proportion of low paid employee jobs.
 Unadjusted gender pay gap had been falling since 2011 but is
flatter in recent years. The gap is larger for women aged 40+.
The latest ASHE release can be found at Employee earnings in the UK: 2023

Questions can be submitted via the slido app using code #11806.
You can also access slido via the link in the chat box.
Q&A

Closing remarks
Sumit Dey-Chowdhury
@ONSfocus #ONSEconForum
Deputy Director
Economic and Microdata Insights
slido #11806

Regional consumer card spending trends 2019 to 2023
• This is the first article based on the ONS collaboration with Visa.
ONS receives aggregated monthly data showing spend at postal
sectors across the UK.
• Overall, average spend per cardholder rose 17% between June
2019 and June 2023.
• While spending fell during periods of national restrictions
because of the coronavirus (COVID-19) pandemic, spending
overall has recovered to pre-pandemic levels.
• Since the start of the pandemic, rural postal areas have
consistently had the highest face-to-face spend relative to spend
in 2019.
• Next we aim to transform the data to local authority districts and
produce more analysis on the distances travelled for different
types of spending, tourism and the CoL impacts on different parts
of the economy
Regional consumer card spending, UK - Office for National Statistics

Forthcoming ONS economic analysis
13 November 2023 Gross Domestic Product and Economic Welfare
14 November 2023 Labour market theme day: including Labour market overview, UK: November 2023
15 November 2023 Prices Theme Day: including Consumer price inflation, UK: October 2023
17 November 2023 Public Service Productivity (PSP) performance, UK: 1997 to 2022
22 November 2023 Business demography, UK: 2022
23 November 2023 Population and Migration Theme Day
27 November 2023 UK Natural Capital Accounts
4 December 2023 The impacts of the cost-of-living crisis on UK household expenditure
4 December 2023 Impact of increased cost of living on adults across Great Britain: July to September 2023
4 December 2023 Accident and emergency waiting times across the UK
6 December 2023 UK industry to industry payment flows, experimental data and insights: Jan 2016 to July 2023
All information on upcoming analysis can be found via the ONS website

Upcoming ONS events
• 21 November 2023 – ONS Local presents: regional card spending trends
2019 to 2023
• 1 December 2023 – Impact analysis of transforming statistics for second-hand
cars and private rents on UK consumer price statistics
• 4 December 2023 – Quarterly Household Costs Indices
• 11 December 2023 – ONS Economic Forum
Further details at: ons.gov.uk/economicevents

Upcoming ESCoE events
• 16 November 2023 – Ryan Decker, Federal Reserve: Surging Business
Formation in the Pandemic: Causes and Consequences?
• 30 November 2023 – Michael Joffe, Imperial College: Evaluating the
Success of an Economy: Basic Human Needs and Wellbeing
• 28 November 2023 – Matthew D. Shapiro, University of Michigan:
Re-Engineering Inflation Statistics using Machine Learning
Further details at: www.escoe.ac.uk/events

ESCoE Conference on Economic Measurement 2024
The Economic Statistics Centre of Excellence (ESCoE) will hold its annual conference, organised in partnership with the UK Office for
National Statistics (ONS), on 15-17 May 2024, at the Alliance Manchester Business School, Manchester
We invite submissions of papers on all aspects of the measurement and use of economic statistics. We welcome contributions using new
methods (such as AI or machine learning) and new sources of data (e.g. high velocity data, web-scraped information or time use data).
Areas we are particularly interested in are:
1. Inclusive Wealth Measures and Looking Beyond GDP
2. National Accounts (Measurement Issues regarding Prices, International Trade, Foreign Direct Investment)
3. Net-Zero, Climate Change and the Environment
4. Subnational Statistics
5. Productivity and Innovation
6. Labour Markets, Households and Inequality
7. Communicating Statistics
8. Economic Measurement in Developing Countries
For details on how to submit a full paper, extended abstract or a proposal for a special session please visit the ESCoE website. Call for
Papers: Deadline 15 January 2024
@ONSfocus slido #11806
#ONSEconForum

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

SlideShare ONS Economic Forum Slidepack - 13 November 2023

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SlideShare ONS Economic Forum Slidepack - 13 November 2023