Quarterly sector accounts, UK: January to March 2022

• The UK's net borrowing position with the rest of the world increased to 8.4% as a percentage of gross domestic product (GDP) in Quarter 1 (Jan to Mar) 2022 compared with borrowing of 1.3% of GDP in Quarter 4 (Oct to Dec) 2021; the latest quarter's borrowing exceeds the previous highest borrowing, seen in Quarter 4 2014, of 7.0% of GDP.

• Real household disposable income (RHDI) fell by 0.2% this quarter, within this nominal households' gross disposable income grew but was offset by quarterly household inflation; this is the fourth consecutive quarter of real negative growth in disposable income, with household quarterly inflation the highest since Quarter 1 2011, when it was 2.4%, driven by financial intermediation services indirectly measured (FISIM) and transport price increases.

• The household saving ratio remained unchanged at 6.8% in Quarter 1 2022.

• Households saw an increase in their net lending position to 0.9% as a percentage of GDP in Quarter 1 2022, up from 0.6% of GDP in Quarter 4 2021; this was driven by a rise in wages and salaries, predominately in the private sector, and an increase in other capital transfers, but partially offset by a rise in final consumption expenditure, itself driven by increased spending on consumption-related FISIM, and restaurants and cafes. 

• General government increased its net borrowing position to 6.7% as a percentage of GDP in Quarter 1 2022, from 5.1% of GDP in Quarter 4 2021; within this, central government saw a fall in net property income driven by a fall in dividend income, capital transfers payable increased reflecting the zero-write-off value of student loans in the previous quarter, and central government final consumption expenditure rose, driven by increased spending on health.

• Non-financial corporations switched to net borrowing of 2.1% of GDP in Quarter 1 2022, following a net lending position of 3.4% in Quarter 4 2021; private non-financial corporations (PNFCs) increased their net acquisition of inventories, driven by manufacturing finished goods, wholesale and retail, and net property income fell driven by increases in dividends paid out during the quarter.

Changes affecting UK trade and FDI statistics

Changes to the way EU imports data have been recorded and collected from January 2022 onwards may have led to a discontinuity in trade figures and the rest of the world's net lending or borrowing position for Quarter 1 (Jan to Mar) 2022. We advise caution when interpreting 2022 data compared with other periods as the impacts of these changes are still being investigated. In addition, changes to the sample framework for foreign direct investment (FDI) statistics means there is a higher degree of uncertainty than usual with inward FDI data. As such, users should be cautious when interpreting Quarter 1 2022 statistics reflecting the UK's interaction with the rest of the world.

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 and Real household disposable income

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.

Revisions within this release

This bulletin includes new data for the latest available quarter only, Quarter 1 (Jan to Mar) 2022.

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

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in our Quarterly sector accounts Quality and Methodology Information (QMI) report.

System of National Accounts consultation

As part of an update to the System of National Accounts, the United Nations (UN) are in the process of consulting on several areas being considered for improvement. Previous and live consultations can be found on the UN Statistics Division website. If you would like to discuss any of these consultations with ONS, please contact us at sna.consultations@ons.gov.uk. Bodies outside the UK National Statistical System are also free to respond to the consultations themselves.

Economic statistics governance after EU exit

Following the UK's exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK's statistical system.

At the centre of this new governance framework will be the new National Statistician's Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world-leading. The advice NSCASE provides to the National Statistician will span the full range of domains in economic statistics, including the national accounts, fiscal statistics, prices, trade and the balance of payments and labour market statistics.

Consultation on ONS release times

The Office for Statistics Regulation has finalised its consultation on release practices. The ONS has welcomed the findings, specifically noting that the release-time exemptions, which were granted during the pandemic, are now incorporated into the revised Code of Practice. As such, the Quarterly sector accounts will continue to be published at 7am.

Business investment

After the release of Quarter 4 (Oct to Dec) 2021 business investment data in March 2022, we discovered a processing error in the production of our own account software estimates for the period of Quarter 1 (Jan to Mar) to Quarter 4 (Oct to Dec) 2021.

The processing error has been corrected for Quarter 1 2022 as of the provisional dataset but because of national accounts revision policy, we are unable to revise 2021 data until the release of the annual National Accounts Blue Book- consistent dataset in September 2022. With all else being equal, the own account software figures will be revised upwards by roughly £1 billion per quarter for each quarter in 2021. A list of the affected series identified is available on request.

Further to this, as part of continued improvement to our own account software series, we will be revising further earlier periods within the annual National Accounts Blue Book 2023 consistent dataset.