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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.

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New Look owners pick bankers to fashion sale process

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New Look owners pick bankers to fashion sale process

The owners of New Look, the high street fashion retailer, have picked bankers to oversee a strategic review which is expected to see the company change hands next year.

Sky News has learnt that Rothschild has been appointed in recent days to advise New Look and its shareholders on a potential exit.

The investment bank’s appointment follows a number of unsolicited approaches for the business from unidentified suitors.

New Look, which trades from almost 340 stores and employs about 10,000 people across the UK, is the country’s second-largest womenswear retailer in the 18-to-44 year-old age group.

It has been owned by its current shareholders – Alcentra and Brait – since October 2020.

In April, Sky News reported that the investors were injecting £30m of fresh equity into the business to aid its digital transformation.

Last year, the chain reported sales of £769m, with an improvement in gross margins and a statutory loss before tax of £21.7m – down from £88m the previous year.

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Like most high street retailers, it endured a torrid Covid-19 and engaged in a formal financial restructuring through a company voluntary arrangement.

In the autumn of 2023, it completed a £100m refinancing deal with Blazehill Capital and Wells Fargo.

A spokesperson for New Look declined to comment specifically on the appointment of Rothschild, but said: “Management are focused on running the business and executing the strategy for long-term growth.

“The company is performing well, with strong momentum driven by a successful summer trading period and notable online market share gains.”

Roughly 40% of New Look’s sales are now generated through digital channels, while recent data from the market intelligence firm Kantar showed it had moved into second place in the online 18-44 category, overtaking Shein and ASOS.

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Coca-Cola brews up sale of high street coffee giant Costa

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Coca-Cola brews up sale of high street coffee giant Costa

The Coca-Cola Company is brewing up a sale of Costa, Britain’s biggest high street coffee chain, more than six years after acquiring the business in a move aimed at helping it reduce its reliance on sugary soft drinks.

Sky News can exclusively reveal that Coca-Cola is working with bankers to hold exploratory talks about a sale of Costa.

Initial talks have already been held with a small number of potential bidders, including private equity firms, City sources said on Saturday.

Lazard, the investment bank, is understood to have been engaged by Coca-Cola to review options for the business and gauge interest from prospective buyers.

Indicative offers are said to be due in the early part of the autumn, although one source cautioned that Coca-Cola could yet decide not to proceed with a sale.

Costa trades from more than 2,000 stores in the UK, and well over 3,000 globally, according to the latest available figures.

It has been reported to have a global workforce numbering 35,000, although Coca-Cola did not respond to several attempts to establish the precise number of outlets currently in operation, or its employee numbers.

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This weekend, analysts said that a sale could crystallise a multibillion pound loss on the £3.9bn sum Coca-Cola agreed to pay to buy Costa from Whitbread, the London-listed owner of the Premier Inn hotel chain, in 2018.

One suggested that Costa might now command a price tag of just £2bn in a sale process.

The disposal proceeds would, in any case, not be material to the Atlanta-based company, which had a market capitalisation at Friday’s closing share price of $304.2bn (£224.9bn).

At the time of the acquisition, Coca-Cola’s chief executive, James Quincey, said: “Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide.

“Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand.

“Costa gives us access to this market with a strong coffee platform.”

However, accounts filed at Companies House for Costa show that in 2023 – the last year for which standalone results are available – the coffee chain recorded revenues of £1.22bn.

While this represented a 9% increase on the previous year, it was below the £1.3bn recorded in 2018, the final year before Coca-Cola took control of the business.

Read more from Sky News:
TikTok puts hundreds of UK jobs at risk
Consumer confidence at highest point this year

Coca-Cola has been grappling with the weak performance of Costa for some time, with Mr Quincey saying on an earnings call last month: “We’re in the mode of reflecting on what we’ve learned, thinking about how we might want to find new avenues to grow in the coffee category while continuing to run the Costa business successfully.”

“It’s still a lot of money we put down, and we wanted that money to work as hard as possible.”

Costa’s 2022 accounts referred to the financial pressures it faced from “the economic environment and inflationary pressures”, resulting in it launching “a restructuring programme to address the scale of overheads and invest for growth”.

Filings show that despite its lacklustre performance, Costa has paid more than £250m in dividends to its owner since the acquisition.

The deal was intended to provide Coca-Cola with a global platform in a growing area of the beverages market.

Costa trades in dozens of countries, including India, Japan, Mexico and Poland, and operates a network of thousands of coffee vending machines internationally under the Costa Express brand.

The chain was founded in 1971 by Italian brothers Sergio and Bruno Costa.

It was sold to Whitbread for £19m in 1995, when it traded from fewer than 40 stores.

The business is now one of Britain’s biggest private sector employers, and has become a ubiquitous presence on high streets across the country.

Its main rivals include Starbucks, Caffe Nero and Pret a Manger – the last of which is being prepared for a stake sale and possible public market flotation.

It has also faced growing competition from more upmarket chains such as Gail’s, the bakeries group, which has also been exploring a sale.

Coca-Cola communications executives in the US and UK did not respond to a series of emails and calls from Sky News seeking comment on its plans for Costa.

A Lazard spokesperson declined to comment.

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TikTok puts hundreds of UK jobs at risk

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TikTok puts hundreds of UK jobs at risk

TikTok is putting hundreds of jobs at risk in the UK, as it turns to artificial intelligence to assess problematic content.

The video-sharing app said a global restructuring is taking place that means it is “concentrating operations in fewer locations”.

Layoffs are set to affect those working in its trust and safety departments, who focus on content moderation.

Unions have reacted angrily to the move – and claim “it will put TikTok’s millions of British users at risk”.

Figures from the tech giant, obtained by Sky News, suggest more than 85% of the videos removed for violating its community guidelines are now flagged by automated tools.

Meanwhile, it is claimed 99% of problematic content is proactively removed before being reported by users.

Executives also argue that AI systems can help reduce the amount of distressing content that moderation teams are exposed to – with the number of graphic videos viewed by staff falling 60% since this technology was implemented.

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It comes weeks after the Online Safety Act came into force, which means social networks can face huge fines if they fail to stop the spread of harmful material.

The Communication Workers Union has claimed the redundancy announcement “looks likely to be a significant reduction of the platform’s vital moderation teams”.

In a statement, it warned: “Alongside concerns ranging from workplace stress to a lack of clarity over questions such as pay scales and office attendance policy, workers have also raised concerns over the quality of AI in content moderation, believing such ‘alternatives’ to human work to be too vulnerable and ineffective to maintain TikTok user safety.”

John Chadfield, the union’s national officer for tech, said many of its members believe the AI alternatives being used are “hastily developed and immature”.

He also alleged that the layoffs come a week before staff were due to vote on union recognition.

“That TikTok management have announced these cuts just as the company’s workers are about to vote on having their union recognised stinks of union-busting and putting corporate greed over the safety of workers and the public,” he added.

Under the proposed plans, affected employees would see their roles reallocated elsewhere in Europe or handled by third-party providers, with a smaller number of trust and safety roles remaining on British soil.

The tech giant currently employs more than 2,500 people in the UK, and is due to open a new office in central London next year

A TikTok spokesperson said: “We are continuing a reorganisation that we started last year to strengthen our global operating model for Trust and Safety, which includes concentrating our operations in fewer locations globally to ensure that we maximize effectiveness and speed as we evolve this critical function for the company with the benefit of technological advancements.”

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