The ONS and BBC and political independence

On Friday the Office for National Statistics (ONS) released revised GDP figures for the last quarter of 2009. The BBC and other media outlets reported this as good news as Q4 growth was revised upwards from 0.1 to 0.3%. In this context, it is worth reading Edmund Conway’s article, “Don’t be fooled: GDP figures were actually revised down.”  

He points out “The size of the British economy … was actually £133m smaller in the fourth quarter than the ONS previously thought,” and goes on to quote Andrew Lilico: “The faster growth … was entirely the result of a downwards revision to 2009 Q3.” Conway also notes with concern that the ONS press release on the revisions is entitled “Services growth in December pushes up GDP estimate.”

In other words, GDP is smaller today than people thought before the revision. The only reason why growth is higher is because three months ago the over-estimate was even greater. One of the authors once read a spoof on Conservative employment figures in 1981 that read: “Though unemployment has risen again, the government is delighted that there has been a slowdown in the rate at which the increase is rising. It is also delighted that, for the fourth month running, the number of unemployed is less than the population of Norway.” But the ONS and the BBC are not the government. The government can spin the figures how they like. However, it is not the job of supposedly independent organisations to (in the case of the ONS) create the spin and (in the case of the BBC) reflect the spin. The headlines should have been “National income revised down” with a possible sub-headline: “Stronger rebound from lower level.”

2 thoughts on “The ONS and BBC and political independence”

  1. Posted 01/03/2010 at 13:41 | Permalink

    Reputation is important, but there seem to be few British institutions which have managed to retain their reputation for trustworthiness in recent years.

    One way to partially overcome examples like the recent nonsense with respect to GDP figures would be to round the numbers off to the nearest whole percentage point. Then the ‘headline’ would hardly be newsworthy: ‘Zero per cent GDP growth rate for 4th quarter revised, but stays at zero per cent!’

    The margin of error in these GDP numbers is so big that it beggars belief that anyone except politicians (those ‘insidious and crafty animals’ — Adam Smith) would focus on a reported change of one tenth of one per cent.

  2. Posted 01/03/2010 at 14:08 | Permalink

    Yes, I’d also spotted this. GDP data are notoriously unreliable for measuring short-run fluctuations. They need to be seen alongside other indicators such as employment, tax take, benefits paid out, money supply etc to form a fuller impression of what’s going on.

    ONS press releases are sometimes dodgy and I wonder how far they are supported by the boffins who really do the counting. In a blog not long ago I pointed out some similar jiggery-pokery in the press release associated with recent estimates of the gender pay gap. There was obviously an attempt to put a spin on figures which could be interpreted differently.

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