Britain's GDP statistics revised upwards again

Earlier this month, when an upward revision by the Office for National Statistics demolished some much quoted political narratives, John Burn-Murdoch published an excellent piece in the FT,

The danger of building strong narratives on weak data | Financial Times (ft.com),

which I blogged about here.

It sounds counter-intuitive for both these things to be true, but it is correct - Britain has both some of the most accurate economic statistics in the world, but at the same time the most pessimistic. Of those countries which take economic data seriously enough to revise and correct it as new data comes in, Britain's initial quarterly GDP figures published by the Office for National Statistics are in the top five for accuracy based on the absolute size of subsequent revisions, ignoring the direction.

But when you stop looking only at the size of the corrections and look at the direction of subsequent corrections, Britain's ONS is the most pessimistic in its' initial estimates: they are the most likely in the world to be subsequently revised up by the largest amount.

Hence it is nearly always a mistake to get too invested in a political narrative based on early data which may well turn out not to be correct. 

All those opponents of the government or of Brexit who built political attack strategies based on the propositions that Britain was the only G7 country whose economy had not recovered to pre-pandemic levels, or that Britain had the worst growth rate in the G7, or indeed that Britain had a much worse COVID-19 death rate than most comparable countries are now faced with the fact that not one of those things was true.

And this week Britain's GDP figures have been upgraded again, for the second time in a month. New economic data shows the UK economy is significantly larger than before the pandemic with growth three times as high as expected, as we deliver on the Prime Minister’s priority to grow the economy.

• The Office of National Statistics have revised UK growth figures for the first six mo nths of 2023, and now estimate that economic growth in the start of this year was be triple what they had previously thought.
• The statistics published today also show that UK GDP is 1.8 per cent higher than before the pandemic – 2 per cent higher than previously thought – putting our growth significantly above G7 countries like France and Germany.
• Conservatives will continue to deliver on the Prime Minister’s priority to grow the economy, creating better-paid jobs and opportunity right across the country.