UK GDP To be Revised Upwards

The UK’s economic output will be revised up as a result of changes to the way gross domestic product (GDP) is measured by the Office for National Statistics (ONS).

Changes include the treatment of research and development and pensions.

The ONS has calculated that the changes mean GDP for 2009 will be revised up by 4.6%, or £65bn.

The changes will apply retrospectively, but 2009 is the most recent year that has had its figures updated so far.

How the changes to the absolute level of GDP will affect the figures for GDP growth, which is the most closely-watched figure on the UK economy, will be announced on 30 June.

Most of these changes have been made by statistical bodies across the world to help make their data comparable.

Of the £65bn increase to GDP for 2009, £22bn comes from the decision that spending on research and development should be treated as an investment by companies, not just as normal spending.

A contribution of £23.6bn comes from changes to the way the ONS treats non-profit institutions that provide services to households. These include organisations such as charities and religious institutions, which often provide their services for free, but the cost of providing the services is still included in the national accounts.

via BBC

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