Britons Might Be Better Off Than Current Statistics Indicateby
Former BOE official Charlie Bean reports on data collection
Growth may be higher, inflation lower, than current data show
Improving analysis of the digital economy could show that Britain’s economy is growing faster and consumers are better off, according to former Bank of England deputy governor Charlie Bean.
Bean, who published his government-commissioned review of official economic statistics on Friday, said the U.K.’s growth rate could be between one-third and two-thirds of a percent higher with improvements to data collection.
“Measuring the economy has never been harder than it is today,” Bean told reporters at the Data Science Institute at Imperial College London. While digital activity is clearly adding to the economy, it’s not necessarily being picked up by the current methodologies, he said.
The current under-representation of the digital economy in statistics also means “there may be some underestimation of the extent to which real incomes are growing,” Bean said. “Some of the sorts of phenomena that we’re looking at could mean that some concept of true inflation is actually rather lower than the official statistics.”
Bean’s comments underscore the potential ramifications of his recommendations for improving the quality of statistics, which include changing the culture of the Office for National Statistics, setting up two new centers to better measure economic activity, making use of administrative data, and applying greater regulatory scrutiny to the statistics office.
The ONS said in a statement that it’s investing “significant resources” to help it capture “all economic activity in the U.K.”
Better use of administrative data would “enable us to met the challenges of measuring the changing, modern economy and aid our transformation into a world-leading statistics institute,” said Jonathan Athow, deputy national statistician at the ONS.
Bean recommended the ONS set up centers of excellence for data science -- most likely with a branch in London and a hub in Newport, where the statistics office has its headquarters. Athow said those are “exciting ideas” that could help the office to “fully embrace the current revolution in data technology.”