Daily Archives: April 25, 2013

Chris Giles

The FT’s US economics editor Robin Harding had an excellent scoop this week on the US plans to change the calculation methodology for the national accounts in a move that will lift US GDP by 3 per cent in July. Even better, he explained that the changes to the way the US statistics authorities plan to count intangible investment and military procurement were not a unilateral act, but part of a United Nations coordinated approach. What effect would this have on Europe, I wondered.

Well, after a root around Eurostat’s website, the UK’s ONS methodology pages and some academic articles, I am really excited. The bottom line for people with better things to do is that Eurostat reckons GDP in most EU countries will also go up by about 2 to 3 per cent. The amount depends on the quantity of R&D expenditure carried out (good for Germany, Sweden and Finland, bad for Greece) and amount of military kit purchased every year (good for France and the UK). With some exceptions, every EU country has to put in place the new European System of Accounts by September 2014. But it gets even more interesting. 

Chris Giles

After almost five years of disappointing services output, Britain’s shops, restaurants, car dealerships and airlines have come to the rescue of George Osborne. They have also saved the country from deeply misleading “triple-dip” headlines, although output is still 2.6 per cent below its 2008 peak.

The preliminary estimate of gross domestic product rose 0.3 per cent in the first quarter. As my column today argued, we should not pay much attention to this figure, since the cash estimates of GDP, which come later, are more relevant to the economy’s predicament. But there are some implications of this positive surprise and I list them here in order of importance.