An improved methodology and fresh data have resulted in a slight increase in estimated GDP growth since the end of 2023. In his latest blog, James Benford talks us through the updated picture of the economy they reveal and the continuing work to improve the quality of key statistics.
The ONS put out a raft of new economic statistics this morning. Today’s quarterly national accounts, balance of payments, business investment, quarterly sector accounts and consumer trends releases reflect both the latest available data and the effect of a series of data updates and methodology improvements that are part of our annual update to national accounts, known as the ‘Blue Book’.
Last month we unveiled the various data and methodological improvements, together with their effect up to 2023. The methodological changes included improved capture of research and development investment, of the UK part of multinational pharmaceutical companies’ output and to the way education is measured. Overall, they revealed that the real output of the economy at the end of 2023 was 0.6% higher than previously thought. Changes were biggest for research and development spending.
What’s new today?
In today’s releases we extend the methodological improvements and take on new data right up to the latest period.
- Cumulative growth since the end of 2023 is now estimated, in real terms, to be 0.3pp higher, at 2.9%, largely due to upward revisions to growth in the second half of 2024, with growth in the first half of 2025 unchanged at 1%.
- GDP is now estimated to have grown 1.4% in the four-quarters to 2025 Q2. Over that period, services and construction output are estimated to be 1.6% and 1.9% higher respectively, but production output fell by 0.4%. Within services, growth has been increasingly driven by business services, with consumer-facing services output falling slightly in the latest quarter.
- Four-quarter growth to 2025 Q2 in consumer spending was 1.1%, with growth in government consumption and investment faster at 2.1% and 2.9%.
- The underlying trade balance is now estimated to be -0.4% of nominal GDP in 2025 Q2, revised up from -1.2% previously. On the revised data, the balance is up from –1.1% in 2024 Q2.
- This narrower trade deficit in 2025 Q2 compared with a year ago was not, however, matched by an improvement in the current account deficit over the same period. Excluding trade in precious metals, the current account was -3.2% of nominal GDP in 2025 Q2, a widening from -1.8% in 2024 Q2. This was driven by a widening in the deficit on primary income, reflecting the UK’s position as a net borrower during a period where global interest rates have increased, as well as a decrease in returns on foreign investments overseas, and an increase in overseas investors returns on their UK investments, particularly in the latest quarter.
Measurement of precious metals
The methodological improvements in today’s releases also include improvements to the measurement of trade of precious metals which remove a double-counting of some precious metal bars between our precious metal series and our material manufacturers series. Regrettably, a processing error means that this adjustment was not applied correctly to a small number of countries, including the United States. As part of our quality assurance processes, we identified this error and its impact on measured exports and imports in late-stage checks ahead of today’s publications. There was not sufficient time to correct the data and so we have instead included detailed notes in today’s publications that indicate where exports and imports are overstated. The data will be fully corrected at the next available opportunity, which is in the UK trade release on 16 October. The processing error does not affect our estimates of total GDP for Quarter 1 and 2 2025, which are driven by the output data at this stage in the data reporting cycle.
What’s next?
The changes we are making at the ONS to reprioritise resources back towards the production of economic statistics, together with the broader investments in those statistics through our economic statistics and survey improvement and enhancement plans, will reduce reliance on legacy systems, improve processing and introduce further quality improvements into our economic data. This work, together with more source data becoming available over time, will result in further revisions to our statistics as we further enhance their quality. I apologise that we were not able to fully put through the corrections to the measurement of precious metals in time for today’s release. We will continue to be transparent as we make improvements to our economic statistics and will provide a full update on progress with our plans in December 2025.
James Benford is Director-General for Surveys and Economic and Social Statistics at the Office for National Statistics.