UK inflation overstated due to government data error, ONS says

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The National Statistics Office said on Thursday that inflation in the United Kingdom is 0.1 percentage points in April due to a tax number of tax numbers provided by a government ministry.

The annual inflation was 3.4 percent, according to corrected data, instead of 3.5 percent estimated at the beginning. Reuters expected economists an average of 3.3 percent, a sharp increase of 2.6 percent in March.

ONS said that a mistake was determined “in an extract of the licensed vehicles data provided … through the administration for transportation, used to calculate a vehicle tax component in April 2025 to enlarge consumer prices.”

He said that the incorrect data has exceeded the number of vehicles subject to VED rates in force in the first year of registration.

He added: “No other periods are affected … ONS will use the balanced data properly from the May 2025 numbers on the right. He added that the official statistics published for DFT are not affected.”

In line with the review policy, he said that April will remain 3.5 percent in its historical history chain.

ONS note that the error was isolated on one set of data used to calculate the VED index.

However, she added, “ONS reviews its quality guarantee operations for external data sources in light of this problem.”

ONS was severely scrutinized due to the reliability of its data after long -term problems with the main labor market surveying has raised doubts about the main indicators such as unemployment, lack of activity and productivity. Errors are also found in its commercial data.

“The ONS problem is that this is a part of a developing weakness that undermines more confidence in the organization’s ability to provide accurate statistics,” said Toni Tarfars, a professor at London Economy College. “Given data and analytical progress in recent decades, this type of failure is more problematic.”

Rob Wood, an economist in the investment consulting consultations for the overall economy consulting, said that although budget restrictions have been at risk of ONS to produce accurate statistics, “errors … accumulate, and have now been affected at one time or another from all the real major economic statistics of inflation, unemployment and heroism.”

While the error is 0.1 points in the inflation rate in April will not “make or break” the reliability of the organization, Wood said, “It is very important that a mountain of restoring confidence in its statistics, which is likely to be a factor that contributes to broader credibility of the bodies that direct the economy,” including the Monetary Policy Committee at the Bank of England.

Last month, the head of the statistics service, Sir Ian Diamond, resigned, quoting “continuous health issues” after a review by the government launched an investigation in April in the leadership, culture and structure of ONS.

The Bank of England was explicit about its difficulties in determining the path of monetary policy due to uncertainty about official data.

“It has an impact on it,” said the ruler of the Bank of England Andrew Billy, when he was asked in the Treasury Department Committee on the House of Commons on Tuesday about the impact of confidence in the official data on the bank’s monetary policy industry.

“Certainly we spend more time, and this is what we should do, given uncertainty.”

On the productivity data that showed a shrinkage throughout the year 2024, Billy told the committee that there was a “mystery”.

He added: “The growth of negative productivity is associated with very dangerous chips. We did not have that last year. So there is a puzzle there. About what the picture is, what the data tells us.”

In April, ONS said it would expand its work in some major policy areas – including measuring public sector productivity and crime against children – to focus on basic economic statistics.