The reality of all this is that, as the FT reports, is that these figures have been revised upwards because instead of UK companies selling off their stocks of unsold goods in 2020 and 2021, as the ONS thought they were doing, they were, in fact, increasing those stocks. That’s all that really needs to be known about this restatement, and to claim that the UK was better off as a result can, as accounting claims go, be filed in the category that is politely referred to as complete codswallop (other words are available).
As any decent accountant will tell you, the movement in stocks of goods held for sale during the course of the period does not actually change the record of income arising during the course of that period. There is good reason for that. Goods held for sale are an asset, or stock. They are not items sold or consumed, which is a flow. And the ONS is clearly incapable of spotting the difference. As a result, it is claiming an increase in assets is income when no one has actually seen the benefit in their consumption. That’s a pretty big claim to make because by common understandings of what makes up income, that’s just wrong.
One day we might, I hope, have UK national income data that makes accounting sense.
This is about GDP, as ONS points out.
P – production. A change in stock levels is a change in production.
Ritchie’s complaining that it’s not a measure of change in income.
We really can’t allow him to get close to economic numbers now, can we?