UK Statistics Failing on Multiple Fronts Pose New Policy Risk

The Office for National Statistics (ONS) has recently warned that the new transformed labour force survey (TLFS) may face delays until 2027, raising concerns about the accuracy of labour market data. This delay could leave policymakers, including the Bank of England, without a comprehensive understanding of the UK labour market, impacting their decision-making on interest rates and economic policy. Delays in accurate labour market data may exacerbate existing economic challenges, such as wage inflation and labour shortages, potentially leading to suboptimal policy responses.

The ONS has been grappling with declining response rates to its flagship labour force survey (LFS), dropping from 39% to 13% between 2019 and 2023. To address this, the ONS is working on a transformed LFS (TLFS) with a shorter survey and further periods of parallel run. Additionally, the ONS is increasing the sample size to improve the existing LFS. These adaptations aim to enhance data accuracy and address the challenges posed by declining response rates.



The revised labour market data estimates by the ONS, showing a revised down productivity growth of -0.9% between April and June, could have significant consequences for economic policy. This slowdown in productivity growth may indicate a less robust economic recovery than previously thought, potentially impacting the Bank of England's interest rate decisions. Slower productivity growth could also lead to lower potential GDP, affecting fiscal policy and the government's ability to meet its spending and borrowing targets. Moreover, it may influence the Treasury's economic forecasts and the Chancellor's budgetary decisions.



The Office for National Statistics (ONS) revised down its estimates for productivity growth, with output per hour now at minus 0.9% between April and June compared to a year earlier (FT, 2024). This revision, following a larger workforce, suggests a slower recovery in productivity post-pandemic. Slower productivity growth can hinder the UK's economic outlook, as it impacts potential GDP growth and living standards. Policymakers, particularly the Bank of England, may need to reassess their interest rate decisions, as slower productivity growth could indicate a less robust economic recovery.

In conclusion, the delays in implementing the Transformed Labour Force Survey (TLFS) pose a significant risk to the UK's ability to make informed policy decisions regarding the labour market. The lack of comprehensive labour market data could lead to suboptimal policy responses, exacerbating existing economic challenges. The revised estimates of productivity growth also have significant implications for economic policy, potentially impacting interest rate decisions and fiscal policy. The ONS must take steps to improve the response rates and data accuracy of the existing Labour Force Survey while awaiting the TLFS to better inform policymakers about the state of the UK labour market.