GDP quarterly national accounts, UK: October to December 2023

Revised quarterly estimate of gross domestic product (GDP) for the UK. Uses additional data to provide a more precise indication of economic growth than the first estimate.

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Release date:
28 March 2024

Next release:
10 May 2024

1. Main points

  • UK gross domestic product (GDP) is estimated to have fallen by an unrevised 0.3% in Quarter 4 (Oct to Dec) 2023, following an unrevised fall of 0.1% in the previous quarter.

  • The economy decreased for two consecutive quarters, while GDP for 2023 as a whole is estimated to have increased by an unrevised 0.1% compared with 2022.

  • In output terms in Quarter 4 2023 there were falls in all three main sectors with declines of 0.1% in services, 1.1% in production, and 0.9% in construction output.

  • In expenditure terms there was a fall in the volume of net trade, household consumption, and gross capital formation in Quarter 4 2023, partially offset by an increase in government consumption.

  • This release includes revisions to periods Quarter 1 (Jan to Mar) to Quarter 4 2023 where total GDP growth is unrevised across all quarters, although there has been some revision to underlying components.

  • The household saving ratio is estimated at 10.2% in the latest quarter, up from 10.1% in Quarter 3 (July to Sept) 2023.

  • Real households' disposable income (RHDI) is estimated to have grown by 0.7% following broadly flat growth in Quarter 3 (July to September) 2023.

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2. Headline GDP figures

UK real gross domestic product (GDP) is estimated to have fallen by an unrevised 0.3% in Quarter 4 (Oct to Dec) 2023. This follows an unrevised fall of 0.1% in the previous quarter. Across Quarter 3 (July to Sept) and Quarter 4 2023 the UK economy is estimated to have decreased by a cumulative 0.4%, revised up from our first estimate of a 0.5% fall as the level of GDP has seen small revisions. Compared with the same quarter a year ago, real GDP is estimated to have fallen by 0.2%.

As explained in our Communicating the UK economic cycle methodology article, the concept of a "technical" recession comprises two or more consecutive quarters of contracting output. Most experts consider the broader picture such as the depth, diffusion (spread) and duration of the change in GDP, as noted in our Uncertainty and the "r" word: What exactly is a "recession"? blog,.

It is also important to note that early estimates of GDP are subject to revision (positive or negative), for more information please refer to our GDP revisions in Blue book: 2023 article. In the past the absolute average revision between the first quarterly GDP estimate and the estimate three years later is 0.2 percentage points when more detailed information is available through the comprehensive annual supply and use balancing process.

The GDP growth vintages are shown in Table 4. In line with the National Accounts Revision Policy, this dataset is open back to Quarter 1 (Jan to Mar) 2023. Figure 1 shows total GDP growth is unrevised across all quarters, although there have been some revisions to individual components of GDP. For more information, see Section 6: Revisions to GDP.

GDP is estimated to have increased by an unrevised 0.1% in 2023, following growth of 4.3% in 2022. Excluding the year 2020, which was affected by the coronavirus (COVID-19) pandemic, this is the weakest annual change in real GDP since the financial crisis in 2009. Our Impact of Blue Book 2023 changes on gross domestic product article explains that data up to 2021 have been reconciled through the supply and use (SUTs) framework to produce one coherent estimate of GDP. Estimates of real GDP in 2022 and 2023 have not yet been fully reconciled in a SUTs framework, so this estimate of real GDP growth in 2023 reflects the average of the output, expenditure and income measures.

There can be differences in the three approaches to measuring GDP, reflecting data uncertainty at this stage. Statistical discrepancies published in our GDP data tables show how far apart the measures are at this stage in the production cycle (Figure 3). Further information on the three approaches to measuring GDP is discussed at the end of this section.

Nominal GDP is estimated to have fallen by an unrevised 0.2% in Quarter 4 2023 driven by a fall in gross operating surplus for corporations. Compared with the same quarter a year ago, nominal GDP is estimated to have increased by 4.9%.

As well as producing estimates of GDP, the Office for National Statistics (ONS) also produces estimates of GDP per capita (or per head), which divides UK GDP by the total UK population. As the UK population is growing, this means that growth in GDP per capita is showing a different trend to growth headline GDP.

Real GDP per head is estimated to have fallen by 0.6% in Quarter 4 2023 and has not grown since Quarter 1 (Jan to Mar) 2022. Across 2023 as a whole, GDP per head is estimated to have fallen by 0.7%.

It is important to note that estimates of GDP per head up to 2021 are based on population estimates, whereas data for 2022 and 2023 are based on interim population projections. In our June quarterly national accounts, we will update our estimates of GDP per head for 2022 in line with the latest mid-year population estimates. Data for 2023 will be updated later in line with mid-year estimates which are expected to be published in summer 2024.

The implied GDP deflator represents the broadest measure of inflation in the domestic economy, reflecting changes in the price of all goods and services that comprise GDP. It is important to note that the GDP deflator covers the whole of the domestic economy, not just consumer spending, and also reflects the change in the relative price of exports to imports. For more information on the implied GDP deflator, see our Measuring price changes of the UK national accounts: February 2023 article.

The implied price of GDP rose by 0.1% in Quarter 4 2023 (previously 0.2%), where the quarterly increase is primarily driven by higher prices in exports, government consumption and household consumption. These were partially offset by a fall in the implied price for gross capital formation as well as an increase in the implied price of imports, which contributes negatively to the GDP implied deflator.

Compared with the same quarter a year ago, there was a continued easing in the growth of the GDP implied deflator which increased by 5.1% (Figure 2).

There have been minimal revisions to the total GDP implied deflator across 2023, however there have been larger revisions to the implied price of gross capital formation and exports, reflecting revised and new data. For example there are revised current price estimates of Financial intermediation services indirectly measured (FISIM) which affect services exports. As part of this release we have also reviewed previously applied balancing adjustments.

The three approaches to measuring GDP

The three approaches to measuring GDP allow us to confront our data sources within the National Accounts framework. Figure 3 shows that real GDP is estimated to have increased by 0.1% in 2023, however there are differences in the three approaches to measuring GDP at this stage in the production cycle. The differences in these approaches across 2022 and 2023 may be for various reasons.

Output approach

In the output approach, we do not currently have final estimates for intermediate consumption (value of goods and services purchased to be used up in the production of goods and services) as outlined in our Impact of Blue Book 2023 changes on gross domestic product article. Initially, we use turnover and output as a proxy for changes in gross value added and assume that the intermediate consumption ratio by industry, calculated in 2021, holds constant into 2022 onwards. For example input costs as a proportion of turnover or output remain fixed. In June 2024, data will be confronted through the SUTs framework for the first time, and as a result we will have estimates for intermediate consumption for 2022.

Expenditure approach

In the expenditure approach, we currently have lower response rates for areas such as the Living Costs and Foods survey which underpin our estimates of household consumption. As explained in our  GDP quarterly national accounts, UK: July to September 2023 release, the 2022 annual benchmark data for the International Trade in Services (ITIS) survey is not yet available because of improving sample methodology and requiring additional time to quality assure the data. However, the quarterly ITIS data for 2022 and 2023 were included in this dataset.

Income approach

In the income approach, we do not have up to date quarterly information on the gross trading profits of businesses as these data are collected from HMRC and are available with a lag of approximately two years. We rely on contextual data (as outlined in our Profitability of UK companies QMI) from other sources to inform these quarterly estimates. There is currently more uncertainty around the compensation of employees figures in this publication because of lower response rates in the Labour Force Survey. We have used additional information from our Pay As You Earn Real Time Information bulletin to help inform the estimates.

Estimates for 2023 will next be open for revision in June 2024 where 2022 data will also be confronted through the SUTs framework for the first time and, as a result there will be one single estimate of GDP for 2022. This release will also incorporate changes from 2020 onwards as well as updating the base year from 2019 to 2022. Further information is provided in our Proposed changes to be implemented in Blue Book and Pink Book: 2024 article.

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3. Output

In Quarter 4 (Oct to Dec) 2023, output is estimated to have fallen by 0.3%, following an unrevised fall of 0.1% in Quarter 3 (July to Sept) 2023. In Quarter 4 2023 services, production and construction all contributed negatively to growth. Across Quarter 4 2023, 12 out of 20 of the sub-sectors experienced a contraction, compared with 7 sub-sectors contracting in the previous quarter.

The services sector is estimated to have fallen by 0.1% in the fourth quarter of 2023, following a fall of 0.2% in Quarter 3 2023. The production sector is estimated to have fallen by 1.1%, following no growth in the previous quarter. Construction output fell 0.9% in Quarter 4 2023, following growth of 0.6% in Quarter 3 2023.

Across 2023 as a whole, both services and construction grew by 0.3% and 2.1%, respectively, while there was a 0.4% fall in production output.

Services

Services output is now estimated to have fallen for three consecutive quarters with a fall of 0.1% (previously a 0.2% fall) in the latest quarter. Figure 4 shows that there were falls in 8 out of 14 sub-sectors, in Quarter 4 2023.

The largest contributor to the fall in total services was a 0.9% fall in information and communication. This was largely driven by falls in computer programming, consultancy and related activities which fell 1.0% on the quarter, alongside publishing activities which fell 4.5% on the quarter. Education also contributed negatively to the fall in services in Quarter 4 2023, with a decline of 0.8% partially attributed to a drop in school attendance.

The third largest contributor to the fall in services was the wholesale and retail trade; repair of motor vehicles and motorcycles subsector which fell by 0.4%. This was largely driven by a 0.9% fall in wholesale trade, except of motor vehicles and motorcycles and a 0.7% fall in retail trade, except of motor vehicles and motorcycles. Our Retail sales publication shows that December 2023 was the largest monthly decrease in retail sales since January 2021 when coronavirus (COVID-19) restrictions were in place. However, our most recent Retail Sales, Great Britain: Febraury 2024 bulletin showed a rebound of 3.6% into January 2024. Our latest GDP monthly estimate, UK: January 2024 bulletin explains how the UK economy performed in January 2024, taking into account all output sectors.

The largest positive contribution to services growth was from public administration and defence; compulsory social security subsector which increased by 1.0%.

Overall, consumer-facing services fell by 0.4% (previously 0.7% fall) in Quarter 4 2023 and this was largely driven by falls in food and beverage service activities and retail trade, except of motor vehicles and motorcycles. This follows a fall of 0.7% (previously a 1.0% fall) in consumer-facing services in Quarter 3 2023.

Annual service sector growth for 2023 is estimated to have increased by an unrevised 0.3%, with 7 of the 14 service subsectors showing growth across the year. The largest positive contributor was administrative and support service activities which increased 5.5% in 2023. However, this was partially offset by a 1.8% fall in wholesale and retail trade and the repair of motor vehicles and motorcycles.

Across 2023, the services sector sees revisions for the following reasons:

  • VAT data for Quarter 3 2023 have been incorporated for the first time.  There is no revision to total services growth; there are a number of offsetting revisions at industry level, most notably to other personal services where our estimate of output is revised up, and is the main reason for the upwards revisions to consumer facing service growth

  • late and updated monthly business survey returns, particularly impacting professional, scientific and technical activities sub-sector

  • updated public sector employment data impacting public administration and defence; compulsory social security sub-sector

  • updated seasonal adjustment which now uses a complete year of data for 2023

Production

The production sector is estimated to have decreased by 1.1% in the latest quarter after no growth in Quarter 3 2023 (revised down from previous publication). This reflects a 1.4% fall in October, despite growth in November (0.5%) and December (0.6%). Further information is provided in our GDP monthly estimate bulletin.

Manufacturing output is estimated to have fallen by 1.0% in Quarter 4 2023, with 10 of the 13 manufacturing subsectors declining, and this was the largest contributor to the fall in production over this period. This follows four consecutive quarters of manufacturing growth.

The largest negative contributors are a 6.5% decline in the manufacture of machinery and equipment n.e.c and a 5.9% fall in the manufacture of rubber and plastics products, and other non-metallic mineral products. However, there were some positive movements in manufacturing as shown in Figure 5, such as the manufacture of transport equipment which grew 2.1%. Anecdotal evidence from the Society of Motor Manufacturers and Traders (SMMT) reported that car manufacturing for December 2023 was up 20.7% compared with the same month last year.

Elsewhere in the production sector, there was a 2.7% fall (revised up from a previous 3.0% fall) in mining and quarrying and a 2.7% fall in electricity, gas, steam and air conditioning supply (revised down from a 2.6% fall). Water supply (sewerage, waste management, and remediation activities) has shown no growth in the quarter (revised down from a previous growth of 0.5%).

Annual production output is estimated to have fallen 0.4% in the year 2023, driven mostly by a 13.7% (previously 14.3%) fall in mining and quarrying as well as falls in water supply (sewerage, waste management and remediation activities), and electricity, gas, steam and air conditioning supply, with manufacturing showing revised growth of 1.1% in 2023 (previously 1.2%).

Across 2023, the production sector saw revisions to growth mainly driven by manufacturing. Overall, the revisions to production reflect:

  • late and updated monthly business survey data

  • new VAT turnover data for Quarter 3 2023

  • updated seasonal adjustment, taking into account a full year's worth of data for 2023

Construction

Construction output is shown to have fallen by 0.9% (revised from a previous estimate fall of 1.3%) in Quarter 4 2023, following growth of 0.6% (previously estimated increase of 0.1%).

The fall in the latest quarter reflects a fall in new work of 4.5%, though there was growth of 4.3% in repair and maintenance. Within new work, private housing sees its fifth consecutive quarterly decline, falling 7.4% in the latest quarter.

Revisions to construction in the latest quarter are driven by new survey data and new VAT turnover data for Quarter 3 2023.

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4. Expenditure

There was a fall in the volume of net trade, gross capital formation, and household consumption in Quarter 4 (Oct to Dec) 2023, partially offset by an increase in government consumption. Figure 6 shows the previous and latest contributions to expenditure growth in Quarter 4 2023. These revisions to components are discussed in more detail in this section.

Household consumption

There was a fall of 0.1% in real household expenditure in Quarter 4 2023, unrevised from the first estimate. This follows an unrevised fall of 0.9% in Quarter 3 (Jul to Sept) 2023. Across 2023 as a whole, household consumption is estimated to have increased by 0.2% (revised down from the first estimate of 0.3% increase), following an increase of 4.8% in 2022.

Within household consumption, the largest contributions to the fall in the latest quarter were from lower spending on recreation and culture, household goods and services, transport, and clothing and footwear. Anecdotal evidence from our Economic activity and social change in the UK, real-time indicators bulletin further showed a lower level of card spending on delayables in the second half of 2023.

Net tourism contributed positively to growth in the latest quarter. Information on how we measure net tourism is provided in our National Accounts articles: Treatment of tourism in the UK National Accounts article.

There have been small revisions to household consumption growth across 2023 with only growth in Quarter 2 (Apr to June) being revised down 0.1 percentage points. Revisions at the lower categories of consumption include updated data on electricity, gas, and transport spending.

Within household consumption, there are downward revisions to net tourism because of updated International Passenger Survey data. These are offset within trade and therefore there is no impact on the gross domestic product (GDP) aggregate. More information can be found in our Definitions and conventions for UK household final consumption expenditure methodology.

Consumption of government goods and services

Real government consumption expenditure increased by 0.1% in Quarter 4 2023 (previously estimated to have fallen by 0.3%). Across 2023, government consumption is estimated to have increased by 0.5%, following an increase of 2.3% in 2022.

The increase in government consumption in the latest quarter mainly reflects higher spending on public administration and defence which offset lower activity in education and health. The fall in health may reflect lower activity because of industrial action across the quarter. Further information is provided in our GDP monthly estimates bulletin as well as working days lost to industrial action as published in our Labour market statistics time series.

Revisions to government consumption reflect new deflator data replacing forecasts for public administration and defence. There are also revisions to health data with updated volume data for hospital services, prescriptions and GPs.

Gross capital formation

Within gross capital formation, gross fixed capital formation (GFCF) is estimated to have increased by 0.9% in the latest quarter (previously estimated as an increase of 1.4%), following an unrevised fall of 1.4% in the previous quarter. Growth in the latest quarter was driven by increases in other buildings and transport. Within GFCF, business investment is estimated to have increased by 1.4%, following a 2.8% fall in Quarter 3 2023.

Across 2023 as a whole, GFCF is estimated to have increased by 2.2% with a 5.5% increase in business investment. This reflects strong growth in Quarter 1 (Jan to Mar) 2023 as businesses brought forward investment in response to the super-deduction allowance expiring on 31 March 2023, as well as a large increase in transport investment (in particular aircraft imports from the United States) in Quarter 2 2023.

There have been revisions to the path of GFCF and business investment across 2023, reflecting revised survey data; latest seasonal adjustment and the removal of previous balancing adjustments.

Excluding the alignment and balancing adjustments, early estimates show that inventories fell by £734m in Quarter 4 2023 (revised down from a first estimate increase of £1.8 billion). The downward revision in the latest quarter reflects revised survey data, in particular in manufacturing.

Net trade

The UK's trade deficit for goods and services was 1.1% of nominal gross domestic product (GDP) in Quarter 4 2023, revised up from a first estimate deficit of 1.6%. However, this includes non-monetary gold which is an erratic series so it can be useful to exclude this from the trade balance. Excluding non-monetary gold, the UK's trade deficit for goods and services is estimated at 1.8% of nominal GDP.

Export volumes fell by 0.8% in the latest quarter, revised up from a first estimate fall of 2.9%. This fall was driven by a 2.4% decline in services exports (previously a 6.0% fall), which offset a 1.2% increase in goods exports (previously a 0.8% increase).

The decline in services exports were driven mainly by travel services and insurance and pension services.

The increase in goods exports was mainly driven by large movements in non-monetary gold however, this series also appears within gross capital formation (GCF) as valuables, so the effect is GDP neutral. Elsewhere there were falls in fuels and machinery and transport equipment.

The upward revision to exports volumes in the latest quarter is mainly driven by services exports, which saw upward revisions because of updated quarterly International Trade in Services Survey (ITIS) data, as well the replacement of forecasts with actual external source data such as Chamber of Shipping and Civil Aviation Authority.

Import volumes fell by 0.3% in the latest quarter, revised up from a first estimate fall of 0.8%. The decline in the latest quarter was driven by a 0.8% fall in goods (previously 0.7% fall) which offset an increase of 0.6% in services (previously estimated as a 0.9% fall).

The fall in goods imports was driven by declines in miscellaneous manufacturers, in particular clothing and other consumer manufactures. The increase in services imports was mainly because of increases in other business services, in particular in insurance and pension services and other business services (within this services between affiliated enterprises).

The upward revision in import volumes is because of stronger estimates of services imports with updated quarter ITIS data, as well the replacement of forecasts with actual external source data such as Chamber of Shipping and Civil Aviation Authority.

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5. Income

Nominal gross domestic product (GDP) fell by an unrevised 0.2% in Quarter 4 (Oct to Dec) 2023, following unrevised growth of 0.7% in Quarter 3 (July to Sept) 2023. This is the weakest growth in nominal GDP since Quarter 2 (Apr to June) 2020.

The quarterly fall was driven by a decline in gross operating surplus of corporations, and other income, which offset increases in compensation of employees (Figure 8).

Compensation of employees increased by 1.0% in Quarter 4 2023 (previously estimated as a 0.5% increase), driven by an increase of 0.5% in wages and salaries, and of 3.4% in employers' social contributions. Compensation of employees is estimated to have increased by 7.4% in 2023 following growth of 7.5% in 2022, mainly because of increases in private sector wages and salaries.

There have been revisions to estimates of compensation of employees across 2023, because of employers' social contributions, which have seen revisions to National Insurance contributions and new pensions contributions survey data. It is important to note that there is more uncertainty around the compensation of employees figures in this publication because of lower response rates in the Labour Force Survey. We have used additional information from Pay As You Earn Real Time Information to help inform the estimates.

Revised estimates show that taxes less subsidies showed no growth in Quarter 4 2023 (previously estimated growth of 1.0%). In the latest quarter, there was a 0.3% increase in taxes (mainly Value Added Tax), which offset a 3.6% increase in subsides. Overall, taxes less subsidies fell by 0.5% in 2023, reflecting a large increase in subsidies because of the Energy Price Guarantee scheme and the Energy Bill Relief Scheme as described in our previous GDP quarterly national accounts releases.

Total gross operating surplus (GOS) of corporations excluding the alignment adjustment fell by 1.7% (Table 3) with falls in both non-financial corporations and financial corporations GOS. Within GOS of corporations, there continues to be uncertainty around the full impacts of the Energy Bill Relief and Energy Price Guarantee schemes that affect the first half of 2023.

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6. Revisions to GDP

In line with the National Accounts Revisions Policy, the dataset is open to revision back to Quarter 1 (Jan to Mar) 2023 as part of this publication. The revised estimates of average real gross domestic product (GDP) compared with the first estimate are shown in Figure 1 while Table 4 shows quarter-on-quarter growth at different publication vintages for real GDP. Revision triangles for GDP and components are available alongside the Quarterly national accounts publication.

The revisions to quarter-on-quarter growth for the components of GDP are shown in Table 5. This release includes the processing of new and revised source data, replacement of forecasts with actual survey or external source data, new seasonal adjustment factors, and a review of GDP balancing.

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7. Quarterly sector accounts

Because of recent technical challenges in processing data from the Office for National Statistics (ONS) Foreign Direct Investment (FDI) surveys, we have temporarily paused processing of these data. This pause will allow us to address the underlying challenges, and safeguard timely and quality data going forward. As a result of the pause, Foreign Direct Investment-related estimates for Quarter 3 (July to Sept) and Quarter 4 (Oct to Dec) 2023 are subject to more uncertainty than usual. Elements that are drawn from the ONS FDI survey are based on Quarter 2 (Apr to Jun) 2023 data. As a result, users should be cautious when interpreting recent FDI data that are part of the UK sector accounts and UK balance of payments (BoP) statistics. Users should also note that we have not yet included annual benchmark data for 2022 estimates. We expect to resume processing of the FDI survey data later in 2024. For further information please contact bop@ons.gov.uk.

Household saving ratio 

The household saving ratio is estimated at 10.2% in Quarter 4 (Oct to Dec) 2023, up from 10.1% in Quarter 3 (July to Sept) 2023. Following seven quarters of greater pension saving contributing to the savings ratio, this quarter non-pension savings contributed more to the savings ratio.

This upward movement was driven by a rise in net social benefits other than social transfers in kind of £3.9 billion together with increased employers' social contributions of £2.0 billion and wages and salaries of £1.4 billion. This was offset by a fall in the adjustment for pension entitlements of £2.7 billion and net property income of £2.4 billion, and a rise in nominal final consumption expenditure of £1.3 billion. The largest contributor to final consumption expenditure was higher expenditure in restaurants and hotels.

Real households' disposable income (seasonally adjusted)

Real households' disposable income (RHDI) is estimated to have grown by 0.7% following broadly flat growth in Quarter 3 2023. Within RHDI, nominal gross disposable income saw growth at 1.1%, because of the drivers described in the previous section on the households saving ratio. This was offset by the fall in property income and an increase in the implied deflator of 0.4%.

Real households' disposable income was revised down 0.4 percentage points, from 0.4% to broadly flat growth in Quarter 3 2023. This is driven mainly by an upward revision in taxes on income and wealth of £1.2 billion and a downward revision in net social benefits other than social transfers in kind of £0.7 billion.

Real households' disposable income per head (RHDI divided by population) grew 0.4% in Quarter 4 2023 and fell 0.3% in Quarter 3 2023. This was revised downwards from positive 0.3% in Quarter 3 because of a downward revision in real households' disposable income of £1.0 billion, and an upward revision in population projections of 319,000.

It is important to note the population data for 2022 and 2023 are based on interim population projections. In our June release, we will update our estimates of RHDI per head for 2022 in line with the latest mid-year population estimates. Data for 2023 will be updated later in line with mid-year estimates which are expected to be published in summer 2024.

Non-financial account net lending and borrowing (seasonally adjusted)

The UK's borrowing position with the rest of the world as a percentage of gross domestic product (GDP) is estimated to have increased to 3.3% in Quarter 4 2023 compared with 2.9% of GDP in Quarter 3 2023.

Financial corporations increased their net lending position to 2.0% of GDP, from 1.4% of GDP in Quarter 3 2023. This was driven by a rise in net property income of £5.7 billion together with falls in gross capital formation of £3.2 billion and the adjustment for pensions entitlements of £2.7 billion, partially offset by falls in net capital transfers of £5.2 billion and in social contributions of £2.5 billion.

Non-financial corporations increased their net borrowing to 2.7% of GDP, from 1.5% of GDP in Quarter 3 2023. Within non-financial corporations, private non-financial corporations (PNFCs) increased their net borrowing to £18.6 billion, up from £10.2 billion in the previous quarter. This increase was driven by a fall in gross operating surplus of £4.2 billion and in net property income of £3.8 billion, partially offset by an increase in net capital transfers of £0.4 billion.

Households decreased their net lending position to 2.9% of GDP, down from 3.1% of GDP in Quarter 3 2023. This was driven by falls in net capital transfers of £2.8 billion, the adjustment for pension entitlements of £2.7 billion, and net property income of £2.4 billion. Partially offsetting this was a rise in social benefits other than social transfers in kind of £3.9 billion and compensation of employees of £3.3 billion.

General government decreased net borrowing to 4.6% of GDP in Quarter 4 2023, from 4.8% of GDP in Quarter 3 2023. Within general government, central government increased net borrowing to £30.4 billion following £30.1 billion in the previous quarter. This decrease was driven by a fall in other current transfers of £3.4 billion, a rise in final consumption expenditure of £1.3 billion and a fall in net social contributions and other benefits of £1.2 billion. This was partially offset by a rise in net capital transfers of £6.3 billion.

Financial account net lending and borrowing (not seasonally adjusted)

Households saw an increase in their net lending as a percentage of GDP in the latest quarter, at an estimated 5.1%, from 2.2% in Quarter 3 2023. This was driven by a rise in currency and deposits of £19.3 billion and net loans of £7.2 billion, offset by a fall in net other accounts of £4.9 billion and in insurance, pensions, and the standardised guarantees of £2.0 billion.

Financial corporations are estimated to have held their net lending as a percentage of GDP at 2.9% in the latest quarter. Their financial account saw a fall in net currency and deposits of £153.0 billion. Offsetting this were rises in net equity and investment fund shares and units of £65.8 billion, net debt securities of £35.1 billion, and net loans of £31.7 billion.

Non-financial corporations have seen a fall in net borrowing as a percentage of GDP to 3.5% in the latest quarter, down from 3.8% in Quarter 3 2023. Within this sector, private non-financial corporations (PNFCs) decreased their net borrowing to £24.2 billion, from £24.6 billion in the previous quarter. This was driven by a decrease in loan liabilities of £16.6 billion, rises in net debt securities of £9.2 billion and equity and investment fund shares and units of £5.6 billion, partially offset by a fall in net other accounts of £28.9 billion.

General government increased their net borrowing as a percentage of GDP to an estimated 6.0% in the latest quarter, from 5.2% in Quarter 3 2023. Within general government, central government increase was driven by a rise in long-term debt securities issued by UK central government of £81.5 billion. This was partially offset by a rise in net other accounts of £23.2 billion, and currency and deposits of £17.1 billion.

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8. International comparisons

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9. GDP quarterly national accounts data

GDP – data tables
Dataset | Released 28 March 2024
Annual and quarterly data for UK gross domestic product (GDP) estimates, in chained volume measures and current market prices.

GDP in chained volume measures – real-time database (ABMI)
Dataset | Released 28 March 2024
Quarterly levels for UK gross domestic product (GDP), in chained volume measures at market prices.

GDP at current prices – real-time database (YBHA)
Dataset | Released 28 March 2024
Quarterly levels for UK gross domestic product (GDP) at current market prices.

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10. Glossary

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11. Measuring the data

Reaching the GDP balance

The different data content and quality of the three approaches: the output approach, the expenditure approach and the income approach, dictate the approach taken in balancing quarterly data. In the UK, there are more data available on output in the short term than in either of the other two approaches. To obtain the best estimate of gross domestic product (GDP) (the published figure), the estimates from all three approaches are balanced to produce an average, except in the latest two quarters where the output data take the lead because of the larger data content.

Quarterly GDP is a balanced measure of the three approaches, while the GDP monthly estimate focuses on gross value added (GVA) and output as a proxy for GDP. This results in data differences (in both levels and growths terms) between the quarterly publications (average GDP) and the GDP monthly estimate (output approach to GDP). Quarterly GDP is the lead measure of GDP because of its higher data content and inclusion of variables, which enable the conversion from a GVA concept to a GDP basis.

Information on the methods we use for Balancing the output, income and expenditure approaches to measuring GDP is available.

Alignment adjustments, found in Table M of our GDP data tables, have a target limit of plus or minus £3,000 million on any quarter. However, in periods where the data sources are particularly difficult to balance, larger alignment adjustments are sometimes needed, as explained in our article, Recent challenges of balancing the three approaches of GDP. Our standard practice is to prefer that the alignment adjustment be out of tolerance rather than over-adjust individual GDP components to achieve a balance. This is most likely to occur in the latest quarter where the constraints are larger, where we must align to the output estimate for the change in GDP, and where the data content is at its lowest.

To achieve a balanced GDP dataset through alignment, balancing adjustments are applied to the components of GDP where data content is particularly weak in a given quarter because of a higher level of forecast content. The balancing adjustments applied in this estimate are shown in Table 7. The resulting data series should be considered accordingly.

Office for Statistics Regulation (OSR) Revisions of estimates of UK GDP review

The Office for Statistics Regulation (OSR) have completed a review of the practices around the preparation and release of information about revisions to estimates of GDP in our Impact of Blue Book 2023 article released on 1 September 2023, as announced on 6 September 2023. The outcome of this review can be viewed on the OSR website. This review covered:

  • processes and quality assurance in making revisions to GDP

  • potential improvements to early estimates of GDP enabled through enhanced access to data

  • communication of revisions to GDP, the story behind the most recent set of revisions in particular, and uncertainty in early estimates of GDP

We published a response to the OSR review into GDP in January 2024, which was positively received by the OSR.

Net trade

HM Revenue and Customs (HMRC) implemented a data collection change affecting data on goods exports from Great Britain (GB) to the EU in January 2021, and data on goods imports from the EU to GB in January 2022. For more information see HMRC's Methodology changes to trade in goods statistics from March 2022 article.

We have applied adjustments to our estimates of goods imports from the EU for 2021 to reflect this data collection change, which brought imports and exports statistics onto a like-for-like basis in 2021, as detailed in our Trade in goods: Adjustments to 2021 EU imports estimates, by chapter dataset. The full data time series for goods imports from and exports to the EU contains a discontinuity from January 2021 resulting from the move from Intrastat to customs declarations, as detailed in our Impact of trade in goods data collection changes on UK trade statistics: adjustments to 2021 EU imports estimates article. We are continuing to work with HMRC to consider possible options to account for this discontinuity.

Separately, in 2021, the use of Staged Customs Controls (SCC) allowed customs declarations to be reported up to 175 days after the date of import for imports of non-controlled goods from the EU to GB. The UK government introduced full customs controls in January 2022, while July 2022 marked the first full month of data where delayed customs declarations submitted under SCC could not be included. Temporary arrangements still apply for imports of goods from Ireland to GB. In our article Impact of trade in goods data collection changes on UK trade statistics: further update on Staged Customs Controls published on 3 July 2023, we presented analysis on the impact of SCC on trade in goods data for imports from the EU to GB in 2022. We have previously adjusted for the impact of SCC and have published an article Impact of trade in goods data collection changes on UK trade statistics: adjustments to 2022 EU imports estimates providing a detailed breakdown of the impact of these adjustments.

In the December 2023 Quarterly national accounts release, we incorporated a number of better quality but less timely annual datasets for 2022, however, annual data for 2022 from the International Trade in Services (ITIS) Survey has not been included in this dataset as we have been developing and improving methodology for the sample and require additional time to quality assure the data. These will be incorporated in our June 2024 Quarterly national accounts. Quarterly ITIS data for 2022 are included in our current dataset.

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12. Strengths and limitations

The UK National Accounts are drawn together using data from many different sources. This ensures that they are comprehensive and provide different perspectives on the economy, for example, sales by retailers and purchases by households. Further information on measuring gross domestic product (GDP) can be found in the Guide to the UK National Accounts, and more quality and methodology information (QMI) is available in the Gross domestic product (GDP) QMI.

Important quality information

There are common pitfalls in interpreting data series, and these include:

  • expectations of accuracy and reliability in early estimates are often too high

  • revisions are an inevitable consequence of the trade-off between timeliness and accuracy

  • early estimates are often based on incomplete data

Very few statistical revisions arise as a result of "errors" in the popular sense of the word. All estimates, by definition, are subject to statistical "error".

Many different approaches can be used to summarise revisions; the "Accuracy and reliability" section in the Gross domestic product (GDP) QMI analyses the mean average revision and the mean absolute revision for GDP estimates over data publication iterations.

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14. Cite this statistical bulletin

Office for National Statistics (ONS), released 28 March 2024, ONS website, statistical bulletin, GDP quarterly national accounts, UK: October to December 2023

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Contact details for this Statistical bulletin

Gross Domestic Product team
gdp@ons.gov.uk
Telephone: +44 1633 455284