LONDON (Reuters) – Britain’s economic growth rate would be higher if its official statistics properly reflected the explosive growth in online activity, former Bank of England Deputy Governor Charlie Bean, said as he wrapped up a review into British economic data.
Fully capturing the impact of firms such as music provider Spotify and retailer Amazon in gross domestic product figures could add between one-third and two-thirds of a percent to the growth rate of the British economy, Bean said.
“I’m not saying the ONS (Office for National Statistics) numbers are wrong. It’s to do with the concept of GDP not capturing a lot of these Internet-based activities,” he said as a final version of his report was published on Friday.
Bean was asked by finance minister George Osborne last year to look into how Britain’s economic statistics could be improved after they came in for criticism, including from Bank of England Governor Mark Carney.
“There is little doubt that users believe ONS performance has deteriorated in recent years,” Bean said.
Carney said in 2013 that ONS measures of business investment were not reliable and work needed to be done on measuring debt levels across the economy, both of them important issues for the BoE as it considers its policy decisions.
The review recommended that the ONS create a new research centre to find better ways to measure digital activity.
It also said the ONS needed a culture shift to become more proactive about addressing short-comings and said Britain was lagging other countries such as Canada in its economics data.
Jonathan Athow, a director general at the ONS, said Britain was following international rules to determine GDP.
“As the review states, measuring the changing digital economy is difficult. The ONS is investing significant resource in ensuring that we can capture all economic activity in the UK economy,” Athow said.
Bean also said the ONS should set up a second centre to look at ways that it could use a vast range of public data which would help it produce more reliable and more up-to-date measures of the economy but which its statisticians struggle to access due to a cumbersome legal framework.
Britain has lagged other rich economies in the use of such data and has relied heavily instead on surveys to measure its economy.
(Reporting by William Schomberg; Editing by David Milliken and Jon Boyle)