The Office for National Statistics (ONS) is making major changes to how it gathers some of the UK’s most important data. These figures shape decisions on wages, benefits, and public spending.

One of the biggest shifts involves how inflation is measured, which is changing on Tuesday. The Consumer Price Index (CPI), which tracks the cost of everyday essentials like food, energy, and transport, is being updated with a new system that aims to capture price changes more accurately.

This matters because inflation figures influence the Bank of England’s decisions on interest rates, which in turn affect the cost of borrowing, savings, and even rent.

For workers, inflation also plays a role in wage negotiations. This is because when prices rise, there’s often pressure on employers and the government to increase salaries, pensions, and benefits.

The ONS will continue sending researchers to shops to check prices and speak to retailers, but from this month, a new digital system will speed up how the data is processed.

It’s also testing a new method using real checkout data from supermarkets. Instead of just recording shelf prices, it will track what people actually pay, including discounts from loyalty schemes like Clubcard and Nectar. This should give a more accurate picture of real spending habits, with full rollout expected by 2026.

The change has been brought about over concerns the previous method measured price changes but failed to capture how consumers changed what they buy as a result.

Take the example of butter, which has gone up in price by 18% in the past year. That increase was reflected in the CPI, influencing the overall inflation figure. However, many consumers will have switched to a dairy spread or margarine rather than keep paying for the more expensive butter.

How is inflation data changing?

While this should improve inflation accuracy, tracking individual product prices may become harder. Sky News’ Spending Calculator, which helps users track price changes, will need updates and won’t be refreshed this month.

An ONS spokesperson said: “From next year we will be replacing much of the physical price collection in supermarkets with information from supermarket tills. While we won’t know what each consumer has bought, we will know both the price and quality of items sold in shops up and down the country, marking a step-change in our understanding of inflation and consumer behaviour.”

Data reliability concerns prompt changes

While these changes to the inflation data are intended to better reflect consumer behaviour, other changes are being introduced due to concerns over reliability.

One of the most affected datasets is the Labour Force Survey (LFS), the UK’s largest household study, which measures the state of the labour market and helps shape decisions on interest rates and employment. However, plummeting response rates mean its reliability is now in question.

“I think policymakers just don’t have as much trust or confidence in the LFS, so they have to find other ways to get the clear insights they used to rely on the LFS for,” said Michael McMahon, professor of economics at Oxford and former Bank of England economist.

“The Bank of England has a set of regional agents who will go out and speak to businesses. They’ll speak to local bodies and even in some cases do citizens’ panels. They were doing that before the LFS issue. It’s just they have to rely on these alternatives more, because they can rely less on the LFS.”

The pandemic accelerated these issues when face-to-face LFS interviews were replaced with phone surveys, causing a sharp drop in participation.

Internal ONS emails, revealed by the Financial Times, showed how one key estimate’s sample size had “collapsed to only five individuals” — too small for reliable statistics.

Resolution Foundation analysis shows that HMRC payroll and self-employment data aligned with LFS estimates before 2020 but after the pandemic began to diverge.

To address this, the ONS is developing the Transformed Labour Force Survey (TLFS), using shorter questionnaires and shifting primarily to online responses, with some face-to-face interviews remaining.

Survey issues aren’t just affecting job figures, they’re also complicating GDP estimates.

The Living Costs and Food Survey (LCF), which tracks incomes and spending and is used for GDP estimates, has seen a sharp drop in response rates, with fewer than one in five forms completed as of December 2024. The survey is particularly time-consuming, requiring participants to log spending for two weeks. A new digital tool allowing receipts to be scanned is in development but won’t launch until late 2025.

For policymakers, these delays are frustrating. “It’s certainly a moment of embarrassment: the idea that the chancellor and the governor [of the Bank of England] go to G7 meetings, talk to other advanced economies, and explain why we don’t know how our labour market is doing with any great confidence,” said McMahon.

Flawed migration data

Recent improvements to the way the ONS gathers migration data also highlight significant failings in the recent past.

Long-term migration estimates are a vital part of public debate and key policy decisions.

Before COVID, migration estimates relied on traveller surveys at airports and ports. These surveys frequently underestimated migration levels, as they depended on people’s own predictions about how long they would stay in the UK.

Under this method, net migration was seen to have peaked in December 2022, at 764,000.

Now, the ONS has shifted to using visa records, higher education statistics, and tax data to provide a clearer picture. Under this new method, it has become clear that net migration has been much higher than previously thought, peaking at 906,000 in June 2023.

Overall, the ONS increased its estimate for net migration in 2023 by more than 25%.

However, while these changes are making migration data more reliable, they also highlight how much of the political debate on immigration in recent years has been built on incomplete figures. The transition to administrative data is a step forward, but further refinements will be needed to ensure long-term accuracy.

The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open-source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.

Global economic growth has been downgraded by the Organisation for Economic Co-operation and Development (OECD) – as the impact of US President Donald Trump’s tariffs becomes apparent.

Major economies including the UK will have lower rates of GDP – a measure of an economy’s value and everything produced – due to the US’s imposition of taxes on some goods it imports, the Paris-based OECD club of 38 rich countries said.

The UK economy will grow only 1.4% this year, as opposed to the 1.7% previously anticipated.

Next year, the figure will be 1.2%, lower than the 1.3% forecast before Mr Trump took office in January, according to the OECD interim economic outlook.

Money blog: West End performer on what it’s really like

It’s more unwelcome news for Chancellor Rachel Reeves after January GDP unexpectedly shrank. The government has repeatedly said growing the economy is its number one priority.

In response to the OECD figures, Ms Reeves pointed out the UK is forecast to be “Europe’s fastest growing G7 economy over the coming years – second only to the US”.

“This report shows the world is changing, and increased global headwinds such as trade uncertainty are being felt across the board,” said the chancellor.

Global GDP will slow, the OECD said, from 3.2% in 2024 to 3.1% in 2025 and 3% in 2026 due to the higher trade barriers caused by the tariffs and the policy uncertainty around their implementation.

US growth has been revised downward to 2.2% in 2025 and 1.6% in 2026. Higher GDP of 2.4% and 3.1% had been expected for this year and next.

While the Eurozone has not escaped the downgrades it is less impacted than first thought, the report said.

“European economies will experience fewer direct economic effects from the tariff measures incorporated in the baseline projections, but heightened geopolitical and policy uncertainty is still likely to restrain growth,” it said.

What’s happening with tariffs?

After some false starts, where levies were announced and paused last minute or not brought into effect at all, tariffs are now in effect on some goods coming from China.

A 25% tariff on all steel and aluminium imports to the US came into effect earlier this month.

Tariffs on Canada and Mexico were suspended until 2 April.

The full effect of tariffs has also yet to be felt as EU retaliatory taxes on US goods are yet to take effect.

In response, Mr Trump said he would impose a 200% tariff on EU alcohol – including wine and champagne.

Read more:
What are Donald Trump’s tariffs – and how will they affect the UK?

Consumers to be hit

It’s consumers who will pay the price for the additional taxes, the OECD said.

“Consumers face much of the burden of higher tariffs,” it said, as it warned of a “significant” impact on living standards.

Thames Water has staved off effective government ownership after an unsuccessful legal challenge to its financial restructuring.

The Court of Appeal has ruled in favour of a £3bn loan intended to temporarily sort out its finances while the company raises more private investment, dismissing an appeal.

The decision backs the High Court judgment of last month and means the UK’s biggest water supplier is unlikely to be taken into special administration – a form of government control – in the coming days.

Without the loan, Thames Water said it would run out of money on 24 March.

The appeal was launched by Lib Dem MP Charlie Maynard and a small group of Thames Water creditors.

Those creditors had objected to the loan as they faced being wiped out completely in the financial restructuring.

The company is now struggling under a £19bn debt pile. It was unable to secure more investment from existing shareholders over the high fines it faced from regulator Ofwat for rule breaches.

Monday’s decision was met with dismay from campaigners and welcomed by Thames Water.

“As a vital public utility serving a quarter of the population, the Environment Secretary should be charting a course to safer waters by putting Thames into special administration and public ownership,” said Matthew Topham the lead campaigner for We Own It, which campaigns for public ownership of public services.

“Instead, Steve Reed has just flushed nearly £1bn of households’ cash down the drain in the form of interest payments and professional fees by supporting this terrible deal to go ahead.”

Thames Water chief executive Chris Weston said “We remain focused on putting Thames Water onto a more stable financial foundation as we seek a long-term solution to our financial resilience.”

“Today’s news demonstrates further progress.”

The first half of the £3bn will come through in “the coming months”, he added.

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