Tomorrow's Business Today
A statistical PR crisis
Tomorrow the UK statistics industry has another chance to embarrass itself, when it unveils June’s inflation figures.
If that sounds harsh, stay with me.
By common consent, including many who work in the sector, economic statistics are not presently fit for purpose.
Perhaps they never were, we just didn’t know.
Last week Sir Robert Chote said he will quit as chair of the UK Statistics Authority after “systemic” failures that allowed “crucial economic data to go unchecked on his watch”.
He is leaving of his own will, but under a cloud.
The Office for National Statistics, which is overseen by the UKSA, has lost the faith of many in the City.
Even economists who feel sorry for the staff, who think they are under resourced, agree there is a serious problem.
In particular, labour market statistics are out of whack. They are not reliable.
How do you set interest rates and other financial policies if you don’t know how many people are in work or out of work?
We do know that there are three jobs at the top of the UK statistics system that need filling, and it is not clear that many credible candidates fancy it.
What we expect tomorrow is for the ONS to say that inflation is rising 3.7% year-on-year – a 16-month high.
Normally, the press just wants to know what the number is. Now it will ask, is that number even close?
Calculating inflation is enormously complicated. The ONS has to measure the costs of many thousands of goods and services, most of which are jumping around, in order to get to one number that is meaningful.
Many people will still think the number is daft, since it doesn’t tally with their own experience.
If the cost of their morning coffee doubles, people are inclined to think inflation is running at 100%, at least on coffee.
In reality, that isn’t what they are measuring. In that instance they figure you can go somewhere cheaper or switch to tea.
The trouble is at the moment even the experts think the numbers are in doubt. It isn’t just the public that doesn’t trust the economics they see on the news.
Problems with the labour statistics seem to have emerged because ONS officials were reluctant to raise concerns with senior management.
That suggests a cultural problem and possibly low staff morale.
Some skilled PR is needed to rectify all of this – a public-spirited person of charisma needs to step forward.
Paul Johnson at the IFS is the economist who talks most clearly about this stuff, but it’s hard to see why he would want to do it.
Applications are open.
Please send candidates for press release of the day to:
Simon.english@roxhillmedia.com
Press release of the day
Some critical stuff here on the government’s Financial Sector Growth and Competitiveness Strategy.
Sara Hall, Co-Executive Director at Positive Money, said:
“It remains unclear how growing the financial sector will deliver the government’s goals of building a clean energy superpower or revitalising British industry – and even less clear how City deregulation will raise living standards for working people.
“The experience of recent years, as well as a wealth of academic evidence, shows that expecting growth to ‘trickle down’ from the financial sector simply does not work.”
Stories that will keep rolling
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