The Office for National Statistics will change the way it measures savings and long-term economic growth in an overhaul this September. The ONS claims the changes will put the UK on terms with Australia, the United States and Canada in economic measurement.
Critics of the measures claim that the change in the way the UK economic is tracked will create “a fiction” of illusory growth. One of the biggest changes to take place is a doubling in the official measure of household savings. The savings ratio will give an indication of total household wealth, including factors like salaries and pensions.
Until now, assets like pension savings have been excluded from measures of average household wealth. Economists believe that the new measurements will increase the average savings ratio for British households to 10 per cent, up from its current level of 5.1 per cent.
The change in statistical measurement could “reverse the UK’s reputation as being addicted to debt”, according to economists. Analysts believe that the changes were likely to result in misleading measurements that made households overly positive about their savings and overall financial situation.
Aldermore managing director Simon Healy, said: “The changes the ONS introduce may well suggest that we as a nation are thriftier than previously thought, though the facts on the ground show this data to be nonsense.”
The changes, according to the Office for National Statistics, are part of a large-scale reform in statistics that is taking place across Europe. The metrics used to measure savings and economic growth are already used by statistics offices in Australia and the United States.
According to the Office for National Statistic, the changes to measuring economic growth will add up to five per cent to the country’s gross domestic product. They would also increase the amount of sovereign debt posted by the UK – total debt in the public sector would increase by as much as £30 billion under the new system.
