Janus Henderson: Data revisions confirm higher UK saving ratio
A reasonable provisional conclusion, pending the 2016-17 revised data, is that household finances are stronger than previously indicated, implying a smaller risk of a significant consumer spending downturn.24.08.2017 | 16:26 Uhr
The Office for National Statistics this week gave a preview of revisions to be included in the national accounts annual update on 29 September. The new figures show the saving ratio averaging 9.3% over 2010-15 – higher even than the alternative measure calculated here (although this may also change significantly when the full new data set is released). The upward revision mainly reflects a correction of previous underrecording of self-employment income.
The chart shows the official saving ratio measure before and after the revision, together with the alternative measure. Revised numbers are not yet available beyond 2015 – a key issue is whether the sharp decline in the old official series in 2016-17 will be mirrored in the new data. The alternative measure is currently shown as rising in 2016.
The upward revision to self-employment income may also have implications for the MPC’s assessment of labour cost pressures. Monthly average earnings numbers cover employees only. To the extent that higher-earners have switched to self-employed status, extracting income through corporate structures, the average earnings series may understate growth of compensation per person across the employed population as a whole. It should be possible to estimate the size of any such effect when the new data set is released.