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.

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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Each Monday, our Money team speaks to someone from a different profession to discover what it’s really like. This week, we chat to Aaron Archer from Joseph And The Amazing Technicolor Dreamcoat and Mamma Mia! about life as a West End performer…

There’s no such thing as a starting salary in the performing arts… A job may be an equity contract with a union that sets out minimum salaries depending on the size of the theatre or the amount of work and many other varying factors. Or it could be a privately/commercially financed job, meaning the salary can vary hugely. All equity minimum figures can be found online but it can range between £600-900 roughly a week for an ensemble member in a West End show. Again, this figure can vary below or above this. The principals will earn a higher salary as well as people who cover other roles or have extra responsibilities such as being the dance captain.

You don’t necessarily have a stable income to rely on… Contracts can differ in length from just a few days to a year or more.

Read all the latest Money news here

Many performers have another job on the side… to supplement their income, as sometimes you can’t solely rely on the earnings from performing.

People might look down at a cruise ship contract… but these performers are extremely talented and earning money doing the job they love just the same as somebody in a show in the West End, with the cruise ship job paying more than a West End contract sometimes.

A usual week consists of eight shows… but over busy periods extra shows can be added. With most shows being around two and half hours, as well as any additional rehearsals, we are working between 35-40 hours a week with one day off.

It’s very hard to plan ahead... You never know what you’re going to be doing or where you are going to be from one year to the next. I went from working on a cruise as a dancer travelling the world, to then the next year making my West End debut in Mamma Mia.

The most important skill to do this job well is… to just be a nice person. Obviously your talent and hard work and dedication will be a huge factor in getting jobs but if you are a nice, friendly person then that will make you 10x more employable.

My favourite part of my job is… knowing that six-year-old me would have never imagined I’d be doing this as my career and getting to meet so many amazing people.

You meet amazing people at the stage door… who want to meet the cast members and sometimes get a picture or signature after the show. But stage door isn’t compulsory and sometimes you do just want to get home to rest and you can be made to feel guilty if people are unhappy that they didn’t get the chance to see you afterwards.

Read more from this series:
What it’s really like to be a… bodyguard
What it’s really like to be a… zookeeper
What it’s really like to be a… driving instructor

My mind has gone blank for split seconds… and there have been multiple occasions where in a scene carrying bagpipes the pipes have fallen off or broken on stage. I’ve just had to carry on while holding a snapped pipe in my hand, somehow managing to keep a straight face.

Rejection is a regular thing to deal with… It’s normal to get emotionally attached to opportunities that you have put so much time and effort into, after rounds and rounds of auditions for a job and waiting weeks to hear if you’ve booked the job or not. It is emotionally draining.

For one role I had to fake tan twice a week… and another I had to wear a wetsuit and flippers on stage while dancing.

Dealing with burnout from a very physically and mentally demanding schedule… can make it harder to have other commitments outside of work and seeing friends and family.

Theatre is good value for money when you look at… how much work goes into what the audience members are seeing on the stage. The sheer volume of people that it takes to put on a show, from the production team to the backstage team, cast, creatives, wardrobe, wigs, makeup, sound, theatre front of house staff and many other teams of people that make it possible. I do think that some ticket prices for some shows have become not as easily accessible, but apps like TodayTiks are great for finding affordable tickets for various shows.