Ben Chu: Don't expect revisions to save the day
Outlook It turns out we're a nation of savers after all. That's what some headlines implied this week after the Office for National Statistics said the new pan-European Union statistical methods it will implement this autumn will have the effect of boosting the household savings ratio from its current paltry-looking 5 per cent to a much healthier 10 per cent.
We should calm down, though. The revisions to the ratio are interesting for a cross-country comparison but they are unlikely to change the picture of UK consumer behaviour in recent years. This is because the ONS has said revisions to the savings ratio will be applied to the latest numbers and the series going back to 1997.
What matters when we're looking at the behaviour of consumers is less the size of the ratio than the rate of change. The present profile shows the savings ratio shooting up in the recession as the public sought to reduce the size of their debt burdens relative to their incomes. And the ratio has come down more recently, fuelling the recovery. The savings ratio is likely to continue to show that up-down trajectory, albeit from a higher starting point, after the ONS's revisions are implemented.
There is a post-modern flavour to some of the commentary about revisions to official statistics: "How can we ever discuss anything when the numbers can change?" This is overblown. Yes, there is inherent uncertainty around the official economic statistics and that should be reflected in the debate. But some data, partial and provisional as it may be, is a far better basis for policymaking than gut feeling.
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits record low as popularity suffers in wake of Ukip sex scandal
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Germany sees 'visible rise' in support for far-right extremism in response to perceived 'Islamisation' of the West
iJobs Money & Business
£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...
£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...
£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...
£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...