14 thoughts on “The deep problems with Trade, Current Account and Balance of Payments data

  1. Those revisions to GDP & BOP for 1967 need to come with an inaccuracy warning. Any such estimates must depend on many indeterminable factors. Mervyn King’s cronies (not including Shaun) have hardly distinguished themselves with the accuracy of their growth predictions ……. The floating rate devaluation is a guide to market value post 1971.

    And in regards to the 1976 IMF “rescue”, just consider an alternative how much worse a total collapse of sterling could be – simply no food in the shops !

    • Hi ExpatInBG

      Your reference to a sterling crisis reminds me how such an issue has almost been redacted from most people’s minds. Even the older city hacks have gone quiet after getting it wrong in early 2013 ( I think HSBC went for parity versus the Euro and a dive into the mid 1.40s against the US Dollar). Yet with the persistent trade and current account deficits a Pound £ fall cannot be said to be a surprise. Perhaps after the 2007/08 experience markets have decided that it would not make much difference anyway.

      One day the world will worry more about trade figures again but as to which day your guess is as good as mine!

  2. Shaun, good stuff! Always thought that GDP figures to decimal points is an absolute joke. Ask any businessman if he could be confident that his figures are that accurate and they would laugh. An entire economy? Forget it! Hence the revisions for years afterwards. The thing I find curious is our revisions are usually up whilst in places like Spain they are down. Do we have pessimistic statisticians?

    • Hi Pavlaki and hi Shaun,

      The dreadful old cynic in me would note that this level of statistical inaccuracy provides convenient and ample opportunity to give a veneer of economic respectability to decisions that have already been made on ideological grounds.

      There really should be a name for people who behave like that.

      Spin Doctors ~ Two Princes

  3. Hello Shaun,

    I’m surprised that with all that imputed unicorn poo stuff that they are not more “accurate ” , after all its just made up on the back of a fag packet isnt it ?

    Still beggars belief that they make spending commitments on a fairy tale whilst tax take is falling behind…..

    oh, PSBR is still way ahead of actual revenues

    Frankly they have got away with it for so long its going to be one hell of a surprise when it breaks……


    PS Does it matter what the GDP figure is when like I said its taxes that need to go up to pay for every thing and if you commit to spending on GDP isnt that like me borrowing on gross pay but having to payback on net?

    Figuring GDP anyway is like predicting a football match on half time results….

    • Hi Forbin

      Yes in many ways the best measure of how well an economy is doing is the revenues or tax take and that took a while to improve in the UK didn’t it? So we had employment improve then output and then finally the tax take. That is a big reason why the PSBR has lagged.

      Actually half-time football results are probably a better guide 😦

  4. Hi Shaun, as always very informative and calling a spade a spade

    Surely it time for GDP to become a non statistic like RPI has been (even though that is far more valid than CPI). All that matters regards deficit and debt credibility are tax revenues measure against income annually for the former and multiples of known revenues for the latter. At least the numbers for these are reasonably accurate and tangible rather than obfuscated, even if not atomically precise.

    In addition, the only inflation statistic that should be considered vital to base major economic decisions upon is the essentials index comprising house prices, rent, council tax, food, energy, water/sewage and transport/motoring costs. How exactly this is to be compiled, I’ll leave to the experts such as yourself but it would surely reflect life on Earth for mere mortals far better

    • Hi Seasiders

      You make some good points. To whose benefit are these numbers for? In essence it is the establishment.

      As to the UK trade figures they lost their National Statistics designation in November

      “On 14 November 2014 , the UK Statistics Authority removed the National Statistics status from UK Trade after the National Statistician alerted the Authority to errors in the expenditure estimates for UK residents’ visits abroad and overseas residents’ visits to the UK contained in the statistical release”

      They got it back in July but you may note that the GDP numbers did not stop. They are too important to the establishment.

  5. Thanks for pointing out the ‘shyness’ relating to the gold market ‘activities’. I am sure that if RR forgot to declare their exports of aero engines for a year or two, there would be questions asked. Why the exemption for gold (not even any added value)?

      • RR paid 141M to the treasury in 2014 (rolls-royce.com) whilst the failed banks still grabbed 37B subsidies at public expense.

        End bank subsidies and let the bad banks go broke. Corporate Social Responsibility is a sham – I only value tangible benefits like taxes paid, jobs created and useful services which benefit wealth creation.

  6. Is Nick Leeson working in the ONS now? Presumably all these losses in export performance and GDP reductions have been placed in a 88888 account so all’s well – and the West doubts the authenticity of Chinese numbers!!

    • Hi Noo2

      I suspect he is still making too much money from books and lectures. Amazing really how failure succeeeds! Back in the day before he went East he was a pleasant chap who played sunday morning football etc…

      Baring Securiites had no-one else to send, what could go wrong?

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