Carney Challenges Stats Office on Snow's U.K. Growth Impact
(Bloomberg) -- Bank of England policy makers challenged the U.K.’s statistics office over its assessment of the impact of bad weather on Britain’s economy last quarter.
While the Office for National Statistics last month said that the overall effect of snow on growth in the first three months of the year was “limited,” the BOE later characterized it as “significant.” Asked by lawmakers on parliament’s Treasury Committee to explain the difference, BOE Governor Mark Carney indicated that the central bank’s judgment draws from a far wider range of data, while the ONS looked only at a single question to businesses, which he said received “very few” responses.
“We used our agency network. Since they go out and visit hundreds of businesses across the country and actually visit them, people answer the question. And not surprisingly, the question on the retail side, on the construction side, distributive services was yes, we were affected.”
The BOE also drew on Google searches for “snow disruption” and looked specifically at sectors that have previously been hampered by bad weather, Carney said.
Deputy Governor Dave Ramsden was even more critical of the statistics agency’s handling of the gross domestic product data, which was based on less than half the data that will eventually be available:
“We try to look across as comprehensive a range of data, looking at what the agents are telling us. The ONS are on a modernization path and they’re refining the way that they’re producing those estimates of GDP. Traditionally there is quite a lot of uncertainty, particularly around those first estimates and then particularly when we have bad weather.”
While the ONS is set to publish its second reading of the data on Friday, economists surveyed by Bloomberg expect no improvement on the 0.1 percent reading. And no matter how much the first-quarter data reflects the disruption caused by snow, rather than a more fundamental slowdown, Carney said he’s not expecting any great rebound in this quarter’s numbers either.
“We don’t think much of that lost output is going to be made up.”
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