Office for National Statistics Director-General James Benford addresses how seasonal adjustments affect GDP measurements amid questions over economic data accuracy.
The numbers told a familiar story this year. UK economic growth surged 0.7% in the first quarter, only to see momentum falter as spring turned to summer. But behind these headline figures lies a more complex tale about how Britain’s economic pulse is actually measured.
James Benford, Director-General for Surveys and Economic and Social Statistics at the ONS, has published new analysis examining the statistical techniques used to strip seasonal patterns from GDP data. The timing isn’t coincidental – recent years have seen a recurring pattern where the UK economy appears to start strongly before losing steam, raising questions about whether seasonal adjustments are painting an accurate picture.
The Challenge of Measuring Growth
Seasonal adjustment removes predictable yearly patterns – think Christmas shopping sprees or summer holiday spending – to reveal underlying economic trends. Yet the ONS acknowledges these techniques have struggled to fully capture evolving variations in spending and activity patterns throughout the year.
The evidence is mounting. While GDP grew 0.7% in the first quarter compared to the previous three months, year-on-year growth actually slowed to 1.2% from 1.4% in the final quarter of 2024. More telling still, PMI data – which measures business sentiment independently of official statistics – showed the composite index tumbling to 48.4 in April, below the 50.0 threshold that separates growth from contraction for the first time since October 2023.
Revisions and Corrections
The ONS isn’t standing still. September’s Blue Book annual update revised cumulative growth estimates upward by 0.3 percentage points to 2.9% since the end of 2023. The statistics office also identified and corrected an error in seasonal adjustment methodology for retail sales data in July.
These adjustments matter beyond Whitehall corridors. Four-quarter growth to the second quarter of 2025 stood at 1.4%, but the picture varies steeply by sector. Services output grew 1.6% over the same period, construction expanded 1.9%, while production output contracted 0.4%.
The challenge for statisticians is that economic patterns themselves are changing. Traditional seasonal rhythms – shaped by decades of consistent consumer behaviour – may no longer hold as working patterns, shopping habits, and business cycles evolve.
Source: @ONS
Key Takeaways
- ONS is reviewing seasonal adjustment methods after recent techniques struggled to remove yearly variations in economic activity
- UK GDP grew 0.7% in Q1 2025 but PMI data suggests underlying weakness, falling to 48.4 in April
- September’s Blue Book update revised growth estimates upward by 0.3 percentage points, highlighting ongoing data refinements
What This Means for Kent Residents
Kent businesses and households should approach economic headlines with healthy scepticism while these methodological reviews continue. The county’s diverse economy – from Dover’s logistics hub to Canterbury’s tourism sector – experiences seasonal patterns that may not align with national adjustments. Local businesses should supplement official GDP data with sector-specific indicators and regional economic surveys when making investment or hiring decisions, chiefly given the recent volatility in PMI readings that suggest underlying economic conditions may be weaker than headline growth figures suggest.