Is the UK's Economic Data in Crisis? ONS Faces Scrutiny Amid Bank of England Concerns

The UK’s Office for National Statistics (ONS), responsible for crucial data influencing public policy and economic decisions, is facing a significant independent investigation due to growing concerns over the reliability of its data. Prompted by criticisms from various sectors, including the Bank of England, the UK government has appointed former senior civil servant Sir Robert Devereux to lead the review. This investigation will delve into the effectiveness of the ONS in delivering essential statistics and will assess its organizational structure and relationships with the Treasury and the Cabinet Office.

The scrutiny comes after repeated issues regarding the ONS’s labour force survey, which collects vital information on employment and economic activity. The Bank of England has expressed significant concerns over the quality of the ONS’s job market data, especially following declines in response rates during the COVID-19 pandemic. Consequently, the central bank has been forced to rely on alternative data sources for making informed decisions regarding interest rates.

In light of these challenges, the ONS has acknowledged its data shortcomings and is preparing to release a new strategic business plan aimed at prioritizing critical statistics and services. Additionally, the ONS has promised the introduction of a more accurate labour data series by next year, although some officials anticipate potential delays until 2027. Sir Ian Diamond, the national statistician, has emphasized the need for this review as an opportunity to enhance the ONS’s performance in a notably challenging environment.