Problems with UK economy data could be widespread, warns lawmaker

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A damaging gap in UK jobs data could cause wider problems with the country’s statistics, a top lawmaker has warned, as the failure left economic policymakers “flying blind”.

Dame Meg Hillier, Labor chair of the Treasury Committee, said she and her fellow MPs were “shocked” and “surprised”. a letter Last month the UK’s leading statistician said it could be 2027 before a new labor force survey is ready.

He drew parallels with other government agencies, such as the Bank of England, as he warned of the damaging consequences of underinvestment in the system.

“It really hit me between the eyes [as] Something is a big, big problem,” Hillier said in an interview with the Financial Times. “If there’s a data gap, what other data gaps might there be? What might be the implications for forecasting?”

A review by former US Federal Reserve Chairman Ben Bernanke last year The BoE has reprimanded For the “low element of investment” in its forecasting tools, the “temporary correction” results in “a complex and unpredictable system”.

Hillier said the problem with labor data Office for National Statistics was “not just a single problem”.

“If we did that with the labor market survey, there would be other areas that we would probably have to look at,” he said. “Bernanke banked some of it [of England]”

An internal review of the ONS last month found that it had failed to produce reliable jobs data Systemic underinvestment and issues of strategy and internal culture. Continued “fluctuation” in data based on old jobs surveys will take time to improve, without policymakers and investors having a clear picture of the UK job market.

Top officials, including BoE Governor Andrew Bailey, have warned that gaps in UK jobs data are making it difficult to set monetary policy. Bailey underlined his frustration in his Mansion House speech in November, warning that it was a “critical issue – and not just for monetary policy – when we don’t know how many people are participating in the economy”.

The ONS has been working over the past year to increase the number of respondents to the survey — the UK’s main source of job market data. A Immersed in the reaction Rates during the pandemic first forced the suspension of Labor Force Survey-based data, then badged it as “development statistics.”

Hillier said the Treasury Committee would likely call Sir Ian Diamond, the National Statistician who oversees the ONS. Discuss the situation. “We were quite shocked when we saw the letter, actually saying ‘we won’t solve this until 2027’,” he said.

In his letter to the Treasury Committee, Diamond said he could not set a firm timetable for the transition to the “transformed” labor force survey (TLFS), although he added that his “desire” is for 2026 rather than 2027.

Although MPs want to question Diamond, Hillier said that “it’s not about us bashing him in public, it’s about how we can get it resolved now – because it’s going to be a big problem”.

He said issues such as weak growth in the UK were making it difficult to assess. “Policymakers are flying blind and that’s causing real problems – we have productivity challenges [and] We don’t understand what’s going on.”

There were widespread questions about the ability of public agencies and funding constraints to modernize their systems, he said.

In his letter, Diamond, who is chief executive of the UK Statistics Authority, spoke of “flatlined core funding, ringfenced budgets and significant inflationary impacts” following the last Conservative government’s 2021 spending review.

“Working within our budget in this context has led to difficult prioritization decisions and the need to drive efficiencies and cost savings across the organization,” he wrote.

Hillier said: “You’ve seen it with other regulators and other organizations outside the sector – asked to do more, not paid to do it.”