Introduction to Labour Market Data
The Office for National Statistics (ONS) is responsible for providing accurate and reliable data on the labour market in the UK. However, the rollout of its revamped labour market data, known as the "transformed labour force survey" (TLFS), may be postponed by six months to the spring of 2027. This would be three years after the initial target publication date.
Background and Initial Plans
The ONS had initially planned to introduce the new labour market data in the spring of 2024. However, due to various challenges, the statistics agency is now considering pushing back the rollout to May 2027 if needed. The base-case target publication date is set for this November, but the ONS has indicated that this could be delayed to 2027 as a backstop.
Reasons for the Delay
One of the main reasons for the potential delay is the decline in response rates to the underlying survey used to create the ONS’s monthly snapshot of the labour market. Response rates have fallen sharply over the past 15 years, but this decline accelerated rapidly after the Covid pandemic. In 2023, response rates dropped to as low as 12.7%, but have since recovered to over 20% after the ONS implemented measures to boost survey participation.
Impact on Policymakers
The lack of reliable labour market data has significant implications for policymakers, particularly at the Bank of England. The governor of the Bank of England, Andrew Bailey, has described the ONS’s data issues as a "substantial problem". Inaccurate jobs data can lead to inappropriate interest rate decisions, which can have far-reaching consequences for the economy.
Other Data Sets Affected
The ONS’s labour market data is not the only dataset that has been affected by declining response rates. Other mainstream data sets, such as the living costs and food survey, have also suffered from similar declines. This has made it challenging for policymakers to make informed decisions.
Conclusion
In conclusion, the potential delay in the rollout of the ONS’s revamped labour market data is a significant issue that has far-reaching implications for policymakers and the economy. The ONS is working to address the challenges and improve response rates, but the delay highlights the importance of accurate and reliable data in informing decision-making. The ONS will make a readiness assessment in the summer before making a final decision on the timetable for moving to the TLFS. Ultimately, the accuracy and reliability of labour market data are crucial for ensuring that policymakers make informed decisions that support the health and stability of the economy.
