MAJOR changes to the way that the UK economy is measured are set to come into force this week, which will likely make the economy significantly larger than previously thought.
The Office for National Statistics (ONS) will tomorrow bring in changes to the country’s national accounts which could boost GDP by around five per cent. The switch comes as part of the European System of Accounts (ESA10), which other nations have introduced.
According to European statisticians, the same changes are estimated to have boosted US GDP, German and French GDP by between two and three per cent.
Despite the higher GDP levels expected, Barclays researchers have previously suggested that national debt levels will appear higher as a proportion of the economy after the changes come in. Public sector net debt is expected to rise by five percentage points, from around 77.3 per cent of GDP this year to 82 per cent, as accounting rules change.
The ONS has previously begun adding parts of the black market economy like prostitution and drugs to GDP figures, measuring the economy as £10bn larger.