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The National Statistics Office said on Thursday that the UK inflation was exaggerated at 0.1 percentage points in April due to an error in tax figures provided by the Government Bureau.
According to revised data, the annual inflation rate was 3.4%, rather than the initial estimated 3.5%. The economists voted by Reuters were hoping for a 3.3% rate, a sharp increase from 2.6% in March.
ONS said the error was identified “in an extract of approved vehicle data provided by the Transportation Department, which is used to calculate the vehicle excise tax component for April 2025 of consumer price inflation.”
The incorrect data said it exaggerates the number of vehicles eligible for the VED rate applied in the first year of registration.
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“The other periods will not be affected.
In line with the revision policy, the April figures remained at 3.5% in the historic series.
ONS noted that the error was separated into one data used to calculate the VED index.
“However, ONS is checking the quality assurance process for external data sources in light of this issue.”
ONS is undergoing intense scrutiny for data reliability as long-term issues in key labor market research raise questions about key metrics such as unemployment, inactivity and productivity. An error was also found in the trade data.
“The problem with ONS is that this is part of a pattern of debilitating that further undermines the organization’s confidence in its ability to provide accurate statistics,” says Tony Travers, a professor at the London School of Economics. “This kind of failure is even more problematic given the advances in data and analytics over the last few decades.”
Robwood, an economist at Pantheon macroeconomics, said budget restrictions undermined the ONS’ ability to produce accurate statistics, but “errors were piling up and now impacted all the real and important economic statistics of intrusions, unemployment and GDP.”
The 0.1 point error in April’s intrusion rate does not “destroy or destroy organizational reliability, but it was important for the ONS to climb the mountain where it restores confidence in statistics.
Last month, head of statistics services, Ian Diamond, resigned after a government-commissioned review began an investigation into ONS leadership, culture and structure in April, citing “ongoing health issues.”
The Bank of England has spoken out about the difficulties in determining monetary policy pathways due to high uncertainty about official data.
BOE Gov. Andrew Bailey said “it has something to do with it” when asked on the House Treasury Committee on Tuesday about the impact of trust on official data on banks’ financial policymaking.
“We certainly spend more time on it. Given the uncertainty, that’s clearly something we should do.”
Regarding productivity data that showed contraction during 2024, Bailey told the committee there was a “puzzle.”
He added: “Negative productivity growth is associated with a very serious recession. We didn’t have that last year, so there’s a puzzle out there.
In April, ONS said it would focus on core economic statistics and reduce work in several key policy areas, including measuring public sector productivity and crime against children.
