Quarterly sector accounts, UK: January to March 2021

• The UK’s net borrowing position with the rest of the world reduced to 2.5% of nominal gross domestic product (GDP) in Quarter 1 (Jan to Mar) 2021 compared with 5% of nominal GDP in Quarter 4 (Oct to Dec) 2020.

• The household saving ratio increased to 19.9% in Quarter 1 2021, which is the second highest on record, compared with 16.1% in Quarter 4 2020.

• The net lending position of households in the non-financial account increased to £57.3 billion (10.6% of nominal GDP) in Quarter 1 2021 from £38.9 billion in Quarter 4 2020 (7.1% of nominal GDP); the increased lending was driven by a further fall in household spending of 3.2% from the previous quarter.

• Non-financial corporations reduced their net borrowing position in the non-financial account to £3.0 billion in Quarter 1 2021 (0.6% of nominal GDP) from £6.0 billion in Quarter 4 2020 (1.1% of nominal GDP); within non-financial corporations, private non-financial corporations increased dividend payments made by 23.8% on the quarter.

• General government increased their net borrowing position in the non-financial account to £72.2 billion in Quarter 1 2021 (13.3% of nominal GDP) from £59.7 billion in Quarter 4 2020 (11.0% of nominal GDP); this higher borrowing was driven by increased final consumption expenditure of 2.8% on the quarter while net property income fell substantially.

• In the financial account, households extended their net lending position while general government reduced their net borrowing position; financial and non-financial corporations increased their net borrowing position.

Revisions within this release

This bulletin includes new data for the latest available quarter, Quarter 1 (Jan to Mar) 2021 only.

This bulletin follows the National Accounts Revisions Policy.

Understanding the sector and financial accounts

This release presents analysis on UK aggregate data for the main economic indicators and summary estimates from the institutional sectors of the UK economy that are presented in the UK Economic Accounts (UKEA) dataset:

• public corporations

• private non-financial corporations

• financial corporations

• households

• non-profit institutions serving households (NPISH)

• central government

• local government

• rest of the world

This release uses data from the UKEA and provides detailed estimates of national product, income and expenditure, UK sector, non-financial and financial accounts, and UK Balance of Payments. These accounts are the underlying data that produce a single estimate of gross domestic product (GDP) using income, production and expenditure data.

Quality and Methodology Information report

The Quarterly sector accounts Quality and Methodology Information report contains important information on:

• the strengths and limitations of the data and how it compares with related data

• uses and users of the data

• how the output was created

• the quality of the output including the accuracy of the data

Seasonal adjustment

All figures given in this bulletin are adjusted for seasonality, unless the financial accounts are under discussion or otherwise stated. Seasonal adjustment removes seasonal or calendar effects from data to enable more meaningful comparisons over time.

Current price

Current price series are expressed in terms of the prices during the time period being estimated. These describe the prices recorded at the time of production or consumption and include the effect of price inflation over time.

Chained volume measures

Chained volume series (also known as real terms) have had the effects of inflation removed.

Gross disposable household income (GDHI) and real household disposable income (RHDI)

Gross disposable household income (GDHI) is the estimate of the total amount of income that households have available to either spend, save or invest including income received from wages (and the self-employed), social benefits, pensions and net property income (that is, earnings from interest on savings and dividends from shares) less taxes on income and wealth.

Adjusting GDHI to remove the effects of inflation gives real household disposable income (RHDI). This is a measure of the real purchasing power of households’ income, in terms of the physical quantity of goods and services they would be able to purchase if prices remained constant over time.

The households’ saving ratio explained

The saving ratio estimates the amount of money households have available to save as a percentage of their gross disposable income plus pension accumulations.

Net lending or borrowing

The net lending of a sector represents the surplus resources that a sector makes available to other sectors, net borrowing represents their financing of a deficit from other sectors.

Net lending means a sector has money left over after its spending and investment in a given period, whereas net borrowing means it has spent and invested more than it received and has a need for financing, which may be covered by borrowing, issuing shares or bonds, or by drawing on reserves.