The doubts around official GDP figures

Q Can we trust the ONS data?

A The first estimate only uses about 40 per cent of the data, so we know it probably isn’t exactly right. It isn’t usually revised a lot, but when the economy is on the brink of recession, a few decimal points look very important.

Q How could anyone else’s be better?

A Survey data can be much more up to date. PMIs, for example, ask a simple question about output levels for the month, get a fast response, and are not revised later.

Q Are there problems with those surveys?

A PMIs only ask if output rose, fell or stayed the same when working out the main figure. RBS economist Richard Barwell argues this removes the size of output changes. He says PMIs are only useful in times of rapid change, and fail to track GDP closely normally. On top of that, they only survey a few hundred firms, rather than the ONS’s thousands.

Q What actually happened with the economy?

A Regardless of whether GDP fell 0.2 per cent or rose 0.2 per cent, the economy remains very weak – unemployment is high, businesses are very cautious with their cash. Do not expect good news any time soon.