The way key economic data is collected is changing – here’s why it matters to you

Published

2 months ago

March 18, 2025

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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.

Business

Concierge firm founded by Queen’s nephew hunts buyer

Published

6 hours ago

May 17, 2025

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Concierge firm founded by Queen's nephew hunts buyer

Quintessentially, the luxury concierge service founded by the Queen’s nephew, is in talks to find a buyer months after it warned of “material uncertainty” over its future.

Sky News has learned that the company, which was set up by Sir Ben Elliot and his business partners in 1999, is working with advisers on a process aimed at finding a new owner or investors.

City sources said this weekend that Quintessentially was already in discussions with prospective buyers and was anticipating receipt of a number of firm offers.

Sir Ben, the former Conservative Party co-chairman under Boris Johnson, owns a significant minority stake in the company.

The Quintessentially group operates a number of businesses, although its core activity remains the provision of lifestyle support to high net worth individuals including celebrities, royalty, and leading businesspeople.

It also counts major companies among its clients and offers services such as organising private jet flights and performances by top musicians.

The sale process is being overseen by a firm called Beyond, although further details, including the price that the business might fetch, were unclear on Saturday.

One insider said parties who had been contacted by Beyond were being offered the option to buy a controlling interest in Quintessentially.

This could be implemented through a combination of the repayment of outstanding loans, an injection of new funding into the business, and the purchase of existing shareholders’ interests, they added.

Quintessentially’s founders, including Sir Ben, are thought to be keen to retain an equity interest in the company after any deal.

In January 2022, newspaper reports suggested that Quintessentially had been put up for sale with a valuation of £140m.

Deloitte, the accountancy firm, was charged with finding a buyer at the time but a transaction failed to materialise.

Sir Ben, who was knighted in Mr Johnson’s resignation honours list, turned to one of Quintessentially’s shareholders for financial support during the pandemic.

World Fuel Services, an energy and aviation services company, is owed £15.5m as well as £3.5m in accrued interest, according to one person close to the process.

The loan is said to include a warrant to convert it into equity upon repayment.

Quintessentially does not disclose the number or identities of many of its clients, although it said in annual accounts filed at Companies House in January that it had increased turnover to £29.6m in the year to 30 April 2024.

The accounts suggested the company was seeing growth in demand from clients internationally.

“During the last year, we have not only renewed important corporate contracts like Mastercard, but have also expanded by adding new corporate clients like Swiss4 in the UK, R360 in India, and Visa in the Middle East and South America,” they said.

In its experiences and events division, it won a contract to work with the Red Sea Film Festival and to provide corporate concierge services to the Saudi Premier League.

It added that Allianz, the German insurer, BMW, and South African lender Standard Bank were among other clients with which it had signed contracts.

The accounts included the warning of a “risk that the pace and level at which business returns could be materially less than forecast, requiring the group and company to obtain external funding which may not be forthcoming and therefore this creates material uncertainty that may cast ultimately cast doubt about the … ability to continue as a going concern”.

This weekend, a Quintessentially spokesman declined to comment on the sale process.

Business

Superstar Adele joins backers of music royalties platform Audoo

Published

23 hours ago

May 16, 2025

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Superstar Adele joins backers of music royalties platform Audoo

Adele, the Grammy award-winning artist, has joined the list of music superstars investing in Audoo, a music technology company which helps artists to receive fairer royalty payments.

Sky News has learnt that the British musician and Adam Clayton, the U2 bassist, have injected money into Audoo as part of a £7m funding round.

The pair join Sir Elton John, Sir Paul McCartney and ABBA’s Bjorn Ulvaeus as shareholders in the company.

Changes to Audoo’s share register were filed at Companies House in recent days.

Audoo, which was established by former musician Ryan Edwards, is trying to address the perennial issue of public performance royalties, in order to ensure musicians are rewarded when their work is played in public venues.

Mr Edwards is reported to have been motivated to set up the company after hearing his own music played at football stadia and in bars, without any payment for it.

Estimates suggest that artists lose out on billions of dollars of unaccounted royalties each year.

London-based Audoo uses a monitoring device – which it calls an Audio Meter – to recognise songs played in public venues, and which is said to have a 99% success rate.

It has struck what it describes as industry-first partnerships with organisations including the music licensing company PPL/PRS to track and report songs played in public performance locations such as cafes, hair salons, shops and gyms.

“At Audoo, we’re incredibly proud of the continued support we’re receiving as we work to make music royalties fairer and more transparent for artists and rights-holders around the world through our pioneering technology,” Mr Edwards told Sky News in a statement on Friday.

“We have successfully reached £7m in our latest funding round.

“This funding marks a pivotal moment for Audoo as we focus on our growth in North America and across Europe, bringing us closer to our mission of revolutionising the global royalty landscape.”

Sources said the new capital would be used partly to finance Audoo’s growth in the US.

The latest funding round takes the total amount of money raised by the company since its launch to more than $30m.

Mr Edwards has spoken of his desire to establish a major presence in Europe and the US because of their status as the world’s biggest recorded music markets.

Adele’s management company did not respond to an enquiry from Sky News.

Business

The Sunday Times Rich List: Billionaires fall as King rises to match Rishi Sunak

Published

23 hours ago

May 16, 2025

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The Sunday Times Rich List: Billionaires fall as King rises to match Rishi Sunak

The King’s personal fortune has shot up by £30m to put him on par with Rishi Sunak and his wife Akshata Murty, while the overall number of billionaires in the UK has plummeted, according to The Sunday Times Rich List.

The 2025 list, published on Friday, shows the King’s personal wealth grew from £610m to £640m, taking him up 20 places to 258 – level with former prime minister Mr Sunak and his wife.

The number of overall UK billionaires has fallen to 156 from 165 in 2024, marking the biggest drop since the rich list began 37 years ago.

Gopi Hinduja and his family, behind the Indian conglomerate Hinduja Group, topped the list for the fourth year running with £35.3bn.

Meanwhile, founder and chairman of global chemicals company Ineos Sir Jim Ratcliffe, who became part owner of Manchester United last year, dropped from fourth place to seventh after his reported wealth went from £23.5bn to £17.05bn.

Sir Jim’s £6.47bn losses marked the biggest on the list, while Russian-born brothers Igor and Dmitry Bukhman, who built a fortune on mobile games such as Gardenscapes and Fishdom, made the biggest gains with nearly £6.2bn.

New entries included makeup mogul Charlotte Tilbury with £350m and Ellen DeGeneres, who left the US for the Cotswolds last year.

The Sunday Times said the list was one of its toughest to compile due to Donald Trump’s tariffs and the subsequent stock market turbulence, adding many from previous years had dropped off the list and others were no longer eligible having fled Britain after Labour’s non-dom crackdown.

Overall, the combined wealth of those on the list stood at £772.8bn – down 3% from the last list.

Speaking to Anna Jones on Sky News Breakfast, Rich List compiler Rob Watts highlighted the story of Tom and Phil Beahon, who own sportswear clothing brand Castore which is now worth £1bn, as one of his favourites.

The brothers from Wirral have debuted at joint 345 on the list with an estimated wealth of £350m.

Calling their story “inspiring”, Mr Watts said: “They dreamed of being sportsmen as lads – one of them got onto the books of Tranmere Rovers and the other played cricket for Lancashire, but their sporting careers were over in their early 20s.

“And they say that failure was critical to driving them to create this £1bn sports kit business that you’ll now see being worn by the England cricket team and the England rugby team.”