By William Schomberg and Andy Bruce
LONDON (Reuters) -Britain’s statistics office, already under fire for its unreliable labour market data, paused publication of industrial inflation figures on Friday, raising further questions about the quality of the country’s official economic data.
It marked the second postponement this month of closely watched figures by the Office for National Statistics after it delayed the release of a set of trade data.
The latest setback comes on top of problems with jobs market figures that have been criticised by the Bank of England, which needs accurate data for its deliberations on setting interest rates.
Friday’s announcement affects data that measure the selling prices of manufacturing and services firms. These figures are also used to adjust economic output in these industries for inflation, and in some trade data too.
“This problem affects the years from 2008 onwards. However, the main impact on annual producer price inflation rates is seen in 2022 and 2023,” the Office for National Statistics said in a statement on Friday.
“As a consequence, we are pausing the publication of (producer price index) and (services producer price index) data, which was next due on March 26, while we rectify this issue,” it said.
The ONS said it planned to recommence publication of the data in the summer.
Separately, the Institute for Fiscal Studies, a think tank, claimed a mistake in the ONS’s estimates of household wealth owing to the treatment of pensions wrongly subtracted 2.3 trillion pounds ($2.98 trillion) from recorded national wealth.
“Unfortunately, the economics underpinning this 2 trillion-pound change is fundamentally unsound,” said Isaac Delestre, a Senior Research Economist at the IFS.
The ONS was not immediately available for comment on the IFS report.
“OH DEAR”
In 2023, the statistics office detected problems with the response rates to its Labour Force Survey (LFS) which is used to calculate Britain’s unemployment rate and other key measures of the jobs market. An improved version of that survey might be released in 2026 or possibly only in 2027.
BoE Governor Andrew Bailey said in November the problems with the LFS were a substantial problem for policymakers, summarising the situation with the phrase “Oh dear.”
The ONS woes reflect years of budget constraints, low pay for its statisticians compared with their private sector peers and reluctance by households to respond to surveys – worsened by the COVID-19 pandemic, said Jonathan Portes, professor of economics and public policy at King’s College London.
“The ONS has therefore in the last 18 months been trying desperately to fix the plane while it’s in flight. And that’s really difficult,” he said of the LFS shortcomings.
“But it is my view that ONS are a now well aware of the issues and are doing their best in a very difficult situation to restore their position,” Portes, who chairs a panel that advises the ONS on labour market data, told Reuters.
He added that the ONS was “probably on the more transparent end” among statistics agencies around the world facing similar challenges, citing its willingness to publicise delays to data.
The ONS said the problems with its producer price data might lead to revisions to estimates of output levels in services, production and construction in 2022 and 2023 but were unlikely to lead to notable changes to the overall economic picture.
Some deflators used for trade in goods and trade in services were also affected, it said.
“If we want our policymakers to be able to make good decisions, we need to provide them with an accurate view of the basic economic facts on the ground,” said Delestre from the IFS.
($1 = 0.7722 pounds)
(Writing by William Schomberg; editing by Sarah Young, Suban Abdulla and Toby Chopra)
