UK GDP Revisions And The Effectiveness Of Scottish Government Decisions

9th September 2023

Last week the Office for National Statistics released their indicative estimates of the impact of the Blue Book revisions to GDP figures. The actual physical book bound in a blue cover is long gone, but the exercise remains, and it's an annual attempt at compiling a set of consistent national accounts for the UK. It's also the time of the year when the ONS introduce important methodological changes and when they revise the historical headline series on the basis of the latest methodology. Subsequent releases throughout the year maintain consistency with this methodology.

The 2023 edition of the Blue Book isn't out until 31 October, but as is usual practice, the ONS have released an indicative series of the expected level of revisions to GDP in advance of it. This allows both official institutions (e.g. the Office for Budget Responsibility) and commentators to work on a basis that is very near to the final numbers rather than relying on what will soon be out-of-date numbers.

What has happened to GDP?
The ONS have revised the level of real UK GDP up significantly in 2020 and 2021 relative to their view of it in the 2022 Blue Book - by 0.6% and 1.6%, respectively. This reduces their view of severity of the fall of output during the first phase of the pandemic and improves their view of the speed of the recovery in quarter 2 of 2021.

Of course, revisions are to be expected over time, although these are relatively large. But they are not that surprising given the difficulty in measuring economic activity during the pandemic. The ONS had to rely on surveys whose representativeness was not as good as usual during that time, and extrapolating from changes in survey results in the face of large changes is a difficult business.

The article is from the Fraser of Allender Institute
Read the full article HERE