Sta­tis­tics body left em­bar­rassed as er­ror in labour data could af­fect in­ter­est rates

Belfast Telegraph - Business Telegraph - - Public Sector Jobs - BY RAVENDER SEMBHY

THE Of­fice for Na­tional Sta­tis­tics (ONS) has been left red-faced af­ter it ad­mit­ted an er­ror when mea­sur­ing labour mar­ket data, a mis­cal­cu­la­tion that could have im­pli­ca­tions for in­ter­est rates.

The sta­tis­tics body ad­mit­ted the blun­der on Mon­day when it is­sued a correction in unit labour costs, which mea­sure the cost of labour to em­ploy­ers for a unit of out­put.

New data re­veals that an­nual unit labour costs rose 2.4% in the se­cond quar­ter, up from the ONS’ ini­tial fig­ure of 1.6%.

The ONS said in a state­ment: “As an­nounced on Oc­to­ber 6, 2017, an er­ror oc­curred in unit labour cost data. We have cor­rected this er­ror in this re­lease.

“This was due to in­come data from the se­cond es­ti­mate of GDP be­ing us­ing in­stead of data from quar­terly na­tional ac­counts. You can see the orig­i­nal con­tent in the su­per­seded ver­sion. We apol­o­gise for any in­con­ve­nience.”

The er­ror, which means labour costs ex­ceeded pro­duc­tiv­ity growth more than first thought, could be sig­nif­i­cant for pol­i­cy­mak­ers at the Bank of Eng­land as it makes up one of sev­eral data points stud­ied when set­ting in­ter­est rates.

Bank of­fi­cials have sig­nalled that they are pre­par­ing for an in­crease in in­ter­est rates this year in the face of ris­ing in­fla­tion linked to the Brexit-in­duced col­lapse in the pound.

How­ever, Fabrice Mon­tagne, chief UK and se­nior Euro­pean econ­o­mist at Barclays, said: “While unit labour costs are now some­what higher than pre­vi­ously, unit wages costs and pro­duc­tiv­ity are un­changed mean­ing that the new se­ries are based on new (higher) non-wages costs.”

Higher costs: Fabrice Mon­tagne

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