Outdated motion numbers recommend a present lower in residing standards is most certainly to be even worse than very first concept, monetary specialists have really cautioned.
Revised numbers from the Office for National Statistics (ONS), launched on Monday, revealed GDP per head dropped by 0.2 pc within the 12 months toSeptember The process, which is made use of as a proxy for residing standards, was modified beneath an earlier quote of 0pc improvement.
However, the present GDP per head numbers depend on out of date motion numbers that recommend the populace is smaller sized than it really is.
The ONS’s GDP per head computations thought net motion was 677,300 within the 12 months to mid 2023, relying upon populace value quotes launched in October.
However, the information physique has really contemplating that claimed net migration added 906,000 people to the populace within the 12 months to mid-2023, up from a earlier quote of 740,000. It recommends the October quantity may need took too frivolously fact dimension of the populace.
Similarly, the numbers for 2024 relied on populace estimates launched in January that thought net motion of 599,000 within the 12 months to mid-2024. However, the ONS claimed beforehand this month that net motion over that period was 728,000.
Paul Dales, of Capital Economics, claimed: “When the ONS incorporates the higher-than-expected migration figures into its population estimates, then GDP per capita will decrease at a slightly bigger rate.”
Mr Dales claimed the quantity was most certainly to be extra modified beneath a lack of 0.2 pc to 0.3 pc.
He included: “We also know that GDP in the fourth quarter will probably be stagnant, if not maybe a chance of mild contraction, and the population probably increased. So you’re probably going to get another decline in GDP per capita in the fourth quarter too.”
Sir Keir Starmer has really made enhancing people’s residing standards amongst his important landmarks for this parliament, definition any falls in GDP per head and real household disposable income (RDHI) per person are extraordinarily harming to the Prime Minister.
Gregory Thwaites, of Resolution Foundation claimed: “Falling GDP per capita is extremely bad. It shows that the first half of this year was a blip. It fell in 2023 as well. That is really unprecedented.”
He included: “It is probably worse than it looks because they are using outdated migration figures. When they go back to do the revision, 2023 and 2024 will look worse. It just shows that the new Government has an even more mis-directed supertanker to turn around.”
Mr Dales claimed: “A step backwards is not what we’re looking for and not what the Government was hoping to achieve either. It’s certainly been a slow start for the new Government in its aim to hit its milestone of improving the living standards of the UK as a whole.”
