The economy grew slightly quicker than first thought in recent decades under new experimental GDP estimates revealed by the Office for National Statistics (ONS).
A “step change” in how the official statistics body calculates GDP figures means the economy grew by an average of 2.1pc every year between 1997 and 2018, a small upgrade from the previous 2pc rise in GDP estimated.
The ONS, which first unveiled plans to transform how it calculates GDP in 2018, said the updated estimates use new surveys to give its analysts a better understanding of how much an industry produces as well as the goods and services it uses to make the products.
It also introduced “double deflation” to remove the impact of inflation in both the costs that companies face and how much they charge for their products.
Rob Kent-Smith, head of GDP at the ONS, explained: “When previously estimating the value of goods produced from a furniture maker over time we would measure the value of the tables being sold, remove the cost of the wood, then adjust for inflation by removing the changing cost of the tables only.
“Under the new system we will separately be removing the impact of inflation from the changing cost of the wood and the changing cost of the tables, giving an improved and more detailed estimate.”
He said this would not change the relative sizes of different industries in the economy but will provide improved estimates of real growth rates “by better removing the effects of inflation to give our best overall estimate of the UK economy”.