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An unnamed massive employer’s late provide of earnings data to the UK statistics company dangers skewing the nation’s fundamental official measure of wage progress, elevating doubts about knowledge that guides financial coverage.
The Workplace for Nationwide Statistics mentioned in a little-noticed footnote to its launch of earnings figures final week that “as an exception”, it was engaged on revisions that might go additional again in time than traditional, “to permit for late and up to date returns we obtained from one enterprise to be included, as a part of enhancing the standard of those estimates”.
Together with the thriller employer might have “a small influence at whole-economy degree”, the ONS mentioned, because the company promised a full clarification when it revealed the revisions.
The earnings figures issued by the ONS are primarily based on a survey of companies, and are intently watched by the Financial institution of England when taking rate of interest choices.
The ONS additionally mentioned final week it was reviewing the best way it adjusts earnings figures to account for seasonal fluctuations — an train it conducts periodically — and that “if required” it will implement revisions to its total historic collection of wage knowledge in “the early a part of 2025”.
The revisions are doubtlessly necessary as a result of the power of UK wage progress on nearly any measure has been a puzzle for analysts, at a time when the financial system and jobs market are stagnant.
The latest ONS figures confirmed common weekly earnings — excluding bonuses — had been 5.9 per cent increased within the three months to January than one 12 months earlier.
Non-public sector wage progress was working even increased, at 6.1 per cent, after apparently accelerating on the finish of 2024, whilst employers reduce on hiring after tax rises on companies outlined in chancellor Rachel Reeves’ October Finances.
The BoE, which has develop into more and more vocal about its considerations over the standard of the UK’s official statistics, drew consideration final week to discrepancies between the ONS earnings figures and different knowledge that advised pay progress, whereas nonetheless robust, had been easing.
The BoE additionally centered consideration on latest volatility in GDP knowledge, ongoing issues with official labour market knowledge and “the significance for policymaking of high-quality and dependable official knowledge throughout the complete vary of financial and labour market statistics”.
The earnings figures haven’t been affected by a drop in response charges by households to the ONS labour power survey that underpins the roles knowledge.
However Andrew Goodwin, chief UK economist on the consultancy Oxford Economics, mentioned that on high of well-publicised points with jobs, inhabitants, commerce and value knowledge, different issues with ONS statistics had been rising “which can be but to be formally acknowledged”.
These included “excessive” swings in retail gross sales figures across the flip of the 12 months, and an rising sample of GDP progress tailing off in the midst of the calendar 12 months, which advised issues with seasonal changes, he claimed.
Goodwin mentioned the earnings figures are “arguably crucial collection for the Financial institution of England”, as they provide an indicator of inflationary pressures within the financial system.
The ONS, which first flagged the potential revisions in February, mentioned it couldn’t but be extra exact about once they could be applied, or determine the employer involved.
Nonetheless, the company famous that each its survey-based knowledge and separate figures primarily based on tax information confirmed comparable, “comparatively robust” wage progress.
The ONS mentioned it commonly reviewed its method to seasonal changes as new knowledge grew to become obtainable, and that one-off impacts such because the Covid pandemic “must be rigorously thought-about and accounted for in any detailed evaluation”.
