Changes to National Accounts Blue Book 2014: Improvements to Household Expenditure Estimates

Transcription

1 Changes to National Accounts Blue Book 2014: Improvements to Household Expenditure Estimates Author: Hugh Skipper, Office for National Statistics Contributions from: David Matthewson, Caroline Walker, Joshua Abramsky, Robbie Jones, Richard Wild, Simon Luke, Office for National Statistics. Date: 30 September 2014 Executive summary This is a technical article to explain the developments affecting the Household Final Consumption Expenditure (HHFCE) estimates for 1997 to 2012 released in the Blue Book 2014 data set. Readers are encouraged to contact the author if they would like more background information. 1 Introduction This article explains the developments affecting Household Final Consumption Expenditure (HHFCE) estimates for 1997 to 2012 released in the Blue Book 2014 data set. The impact on HHFCE estimates for 2013 Q1 onwards is shown in the 2014 Q2 Consumer Trends release also published on 30 September Developments include: Inclusion of estimates of expenditure on illegal activities (narcotic drugs and prostitution). Improved sources and methods for pensions. Improved data for financial intermediation services indirectly measured (FISIM). Improvements resulting from a review of exhaustiveness adjustments and historic ratios. Updated balancing of HHFCE estimates against data for other sectors of the economy (Supply and Use balancing). This includes reassessment in the light of improved data for Non-Profit Institutions Serving Households (NPISH). The improvements to HHFCE implemented in Blue Book 2014 fall into three main categories: 1. changes required under new international standards and guidelines: European System of Accounts 2010 (ESA10); Balance of Payments Manual 6 (BPM6), 2. changes from ensuring comparability in measuring Gross National Income (GNI) across European Union (EU) countries, and, Office for National Statistics Page 1

2 3. other changes to meet user needs. These include improvements in the measurement of current price imputed and actual housing rentals. The article also highlights a number of planned future HHFCE developments, including the publication of longer-run time series for detailed HHFCE components. 2 Blue Book 2014: HHFCE revisions in current price terms There are upward revisions to the level of headline (national concept) annual HHFCE in all years from 1997 to Upward revisions average 2.5% and the largest revisions, of 3.4% to 3.8% are between 2008 and Revisions to current price annual growth rates between 1998 and 2012 average +0.1% and range between +1.0% (in 2008) and -0.6% (in 2001). See Figure 1. Figure 1: Annual HHFCE growth rates, comparison of Blue Book 2014 and previous estimates (current prices) per cent Revisions 2014Q1 Blue Book The revisions to current price levels are summarised in Table 1. Revisions are mainly driven by: Introduction of estimates of expenditure on illegal activities (prostitution and narcotic drugs). Improved data for Non-Profit Institutions Serving Households (NPISH). These improvements have been implemented through Supply and Use balancing. Improved sources and methods for Financial Intermediation Services Indirectly Measured (FISIM). Improved sources and methods for pensions. There are also impacts from: Office for National Statistics Page 2

3 Improvements following a review of the exhaustiveness adjustments and historic ratios used in HHFCE estimation. Improvements to the data for actual and imputed rentals for housing. These only affect HHFCE at current prices; they do not impact on HHFCE in real terms (chained volume measures). Other revisions from the Supply and Use balancing process (i.e. in addition to those from the improved NPISH data). These are included in column h, Other revisions in Table 1. Revisions due to more minor improvements to sources and methods and due to later data for existing sources (including benchmark data from ONS s Annual Business Survey). These are also included in column h in Table 1. Table 1: Total annual HHFCE: Revision between Blue Book 2014 and previous estimates (current prices, million) Total revisions to HHFCE Contributions to total revisions: Illegal activities NPISH FISIM Pensions Exhaustiveness adjustments, historic ratios Actual and imputed rent Other (incl later data) million million million million million million million million a b c d e f g h ,322 9,800 1,121 1,418-1, ,960 9, ,941 1, ,350 9, ,540 9, ,842 1, ,185 9, ,027 9,195 1, ,852 9,396 2,490 1, ,445 10,118 3,391 3,170 1, ,964 10,306 4,229 2,204 2, ,996 12,085 5,396 2,016 3, ,245 12,586 6,573 1,584 4, ,866 12,227 8,260 9,948 3, ,584 12,389 9,518 6,750 2, ,230 11,370 11,362 3,977 3, ,613-5, ,961 12,615 13,740 6,437 4,626 1,660 1,268-8, ,904 12,334 11,007 7,811 5,827 2,338 1,758-5,171 3 Blue Book 2014: revisions to HHFCE chained volume measures In Blue Book 2014, the reference year for the chained volume measures has been updated from 2010 to Office for National Statistics Page 3

4 Revisions to annual growth rates of the chained volume measure for total HHFCE are shown in Figure 2. Between 1998 and 2012, revisions average +0.1% and range between +0.4% (in 2006, 2008 and 2011) -0.5% (in 2010). Figure 2: Annual HHFCE growth rates, comparison of Blue Book 2014 and previous estimates (chained volume measures) per cent Revisions 2014Q1 Blue Book Contributions to revisions to annual growth rates of total HHFCE are summarised in Table 2. In many cases, revisions to chained volume measures reflect revisions in current price terms. Exceptions are: Illegal activities. As the Blue Book 2014 data set is the first time narcotic drugs and prostitution have been included, the methodologies for both the current price and chained volume series are new. Imputed and actual housing rentals. As already mentioned, the Blue Book 2014 changes do not affect the chained volume measures. FISIM current price and chained volume measures use different indicators. The Blue Book 2014 improvements mainly affect the current price FISIM data; revisions to chained volume measures are much smaller. Office for National Statistics Page 4

5 Table 2: Total HHFCE, contribution to revisions to annual chained volume measure growth rates between Blue Book 2014 and previous estimates (%) Total revisions to HHFCE yr-on- yr growth 1 Contribtions to total revisions: Illegal activities NPISH FISIM Pensions Exhaustiveness adjustments, historic ratios Actual and imputed rent a b c d e f g h Other (incl later data) contributions may not sum to totals, due to rounding 4 Improvements to sources and methods: further details This section gives further details of individual developments in the Blue Book 2014 data. 4.1 Illegal activities (narcotic drugs and prostitution) As part of the changes from ensuring comparability in measuring GNI across EU countries, ONS has introduced estimates for narcotic drugs and prostitution into the UK National Accounts in the Blue Book 2014 data set. As a result, two new Classification Of Individual Consumption by Purpose (COICOP) classifications are included in Consumer Trends. These are COICOP 02.3 (Narcotics) and COICOP 12.2 (Prostitution). In 1997, these new components added 1.9% to total current price HHFCE, falling to 1.3% in Along with the additions to HHFCE from illegal activities, there are small adjustments to HHFCE on some other goods and services. These include clothes bought by prostitutes and electricity used in UK cannabis production. The adjustments are made because some of the expenditure on these items is now no longer classed as final consumption. Instead, it is treated as part of the costs (intermediate consumption) associated with the illegal activities. Office for National Statistics Page 5

6 The largest total adjustment in any year is just over 320m (in 2007), which means that the impact of the adjustments on total HHFCE is very small. The impact of introducing the new series (including the adjustments to other COICOP categories) is shown in column b of Tables 1 and 2. The drugs component has more impact on total HHFCE than prostitution. This is because it is larger in current price terms and its current price and chained volume measure paths are more volatile. The article Inclusion of Illegal Drugs and Prostitution in the UK National Accounts published on 29 th May 2014 gives a full description of the sources and methods for illegal activities estimation. Illegal activities are, by their nature, difficult to measure and ONS plans further work to develop the new series. This will include independent reviews of ONS s sources and estimation methods. 4.2 FISIM (COICOP ) There are large current price revisions to HHFCE on Financial Intermediation Services Indirectly Measured (FISIM) in the Blue Book 2014 data set. These revisions are due to changes from ensuring comparability in measuring GNI across EU countries. The revisions are shown in column d of Tables 1 and 2 and in more detail in Table 5. FISIM is a measure of the implicit fees that banks and other financial intermediaries charge depositors and borrowers through interest rate differentials. It is estimated as the difference between interest calculated at a reference rate and the interest actually paid to depositors and charged to borrowers. The reference rate should equate to the cost of funding for banks. In the context of HHFCE, the most important change to FISIM for Blue Book 2014 is a new reference rate that gives a truer reflection of banks funding costs. The article Changes to Financial Intermediation Services indirectly measured published on 29 th May 2014 gives further details. As can be seen in Table 5, the FISIM changes have a much smaller effect on HHFCE chained volume measures than on the current price data. This is mainly because the new reference rate has less impact on the chained volume measures. FISIM chained volume measures use movements in value of loans and deposits to indicate growth and these are independent of the reference rate. Office for National Statistics Page 6

7 Table 5: FISIM HHFCE component, revisions to current price and chained volume measure series Current price FISIM HHFCE levels Revisions to growth Previously published FISIM HHFCE Latest FISIM HHCFCE Revisions Current price FISIM HHFCE Chained volume measure FISIM HHFCE million million million % % Pensions The new ESA10 guidelines have brought wide-ranging changes to the treatment of pensions in the UK National Accounts. These include changes to the method for estimating HHFCE on pensions, which explain a large part of the revisions to COICOP (Other financial services not elsewhere classified). HHFCE on pensions equates to the service charge made by pension providers and, under ESA10, it is calculated as a percentage of the fund value. Under the previous guidelines, a more complex algorithm was used. The changes give a downward current price revision to HHFCE on pensions in 1997, with upward revisions in all years from 1998 to The largest upward revision is the revision of + 5.8bn in 2012 (see column e in Table 1). Unlike the changes to FISIM, the current price revisions to pensions have a direct impact on the chained volume measures. The impact of pensions on revisions to headline HHFCE growth is shown in column e of Table 2. The largest impact is in 1998 and this reflects the switch from a downward current price revision in 1997 to an upward revision in Office for National Statistics Page 7

8 The article Developments to the Treatment of Pensions in the National Accounts published on 28 th April 2014 gives further details of the changes to pensions sources and methods within the National Accounts. 4.4 Review of exhaustiveness adjustments/historic ratios As part of the developments to ensure comparability in measuring GNI across EU countries, ONS is carrying out a programme of work to review the exhaustiveness adjustments and historic ratios used in the National Accounts. Exhaustiveness adjustments include adjustments to allow for activity not readily covered by survey or administrative data, such as undeclared building/decorating work done in the home. In HHFCE, historic ratios are used, for example, to apportion total expenditure between final consumers and business. This work has resulted in improvements to HHFCE for Blue Book They affect: i) Motor fuel (COICOP ), ii) Satellite and cable TV (part of COICOP , Cultural services), and iii) Games of chance (COICOP ). The overall impacts on total HHFCE current price levels and chained volume measure growth rates are shown in column f of Tables 1 and 2. Tables 6 and 7 below give a more detailed breakdown Motor fuel (COICOP ) ONS receives quarterly data on total sales of motor fuel (split between petrol and diesel) from the Department for Environment and Climate Change (DECC). Data from DECC include both expenditure by consumers (HHFCE) and spending by business. To estimate the HHFCE portion, ratios derived from ONS s Living Costs and Food survey (LCF) are applied to the totals from DECC. For Blue Book 2014, the LCF- based ratios have been updated up to The ratios had previously been left unchanged since This improvement has caused upward revisions to current price annual levels and growth rates from 2008 onwards (see Table 6) Satellite and cable TV (part of COICOP ) HHFCE estimates for satellite and cable TV, within COICOP (Cultural services), are based on quarterly sales data covering a large part of the UK market, scaled up by a ratio to estimate total HHFCE. This ratio is based on data published by OFCOM (the UK industry regulator) and had been unchanged since Ratios have now updated up to Quarterly sales data have also been improved. Previously, these included an element of sales to businesses, such as bars and hotels. Sales to business are now excluded, to give a better match with the HHFCE definition. The improvements to satellite and cable TV are not the only improvements affecting COICOP There are also significant revisions to other sub-components, due to the NPISH improvements. See the section below on Supply and Use Balancing/NPISH improvements. Office for National Statistics Page 8

9 4.4.3 Games of chance (COICOP ) Quarterly HHFCE for some of the components of COICOP , Games of chance, is estimated by combining figures on duty receipts from Her Majesty s Revenue and Customs (HMRC) with historic ratios. The historic ratios represent the takings of bookmakers and other betting and gaming operators. Components estimated in this way include off-course bookmakers and bingo. HMRC figures do not include on-course bookmakers, as they are not liable for duty. To allow for this, on-course betting is covered by an exhaustiveness adjustment, based on a historic ratio between on-course and off-course betting. ONS has introduced improvements for Blue Book 2014 which mean there is now much less reliance on historic ratios. These improvements entail benchmarking the quarterly HMRCbased data for a number of components to annual figures for gross gambling yield, published by the Gambling Commission. Gross gambling yield is the gross amount retained by bookmakers and other providers of gambling services, after payment of winnings. This matches the definition required for HHFCE. The components that are now benchmarked are: on and off-course bookmakers, remote betting with UK- based operators, pools betting, and bingo. Gambling Commission figures are available back to 2008/9. Quarterly data for earlier years are linked onto the new 2008/9 levels, using the growth rates of the existing series. Office for National Statistics Page 9

10 Table 6: Review of exhaustiveness adjustments/historic ratios, revisions impact on HHFCE (current prices, million) Total revisions from exhaustiveness/ historic ratios Revisions from motor fuel Revisions from satellite and cable TV Revisions from games of chance million million million million Office for National Statistics Page 10

11 Table 7: Review of exhaustiveness adjustments/historic ratios, contributions to revisions to total HHFCE annual chained volume measure growth rates (%) Contributions to revisions to total HHFCE Total contributions from exhaustiveness/ historic ratios 1 Contributions from motor fuel Contributions from satellite and cable TV Contributions from games of chance % % % % contributions may not sum to totals, due to rounding There are still improvements to be made in the sources and methods for both satellite and cable TV and gambling. For example, the quarterly path for gambling is still reliant on historic ratios. These categories remain priority areas for further development work. 4.5 UK tourist expenditure abroad: remote gambling with non-uk operators As part of the work to bring the HHFCE estimates into line with the new BPM6 Balance of Payments guidelines, ONS has introduced estimates for remote gambling with offshorebased providers. This expenditure was previously not covered in the National Accounts. As it relates to offshore providers, it is included in the UK tourist expenditure abroad category published in Consumer Trends. UK tourist expenditure abroad feeds into total (national concept) HHFCE. It has no impact on gross domestic product (GDP), however. This is because tourist expenditure abroad is classed as imports of goods and services. Imports are deducted in the calculation of GDP, so the net impact of tourist expenditure abroad is zero. In current price terms, the new remote gambling series adds 18m to national concept HHFCE in 1997, rising to 1.9bn in Revisions to the chained volume measures are in Office for National Statistics Page 11

12 line with the current price revisions. In the context of total HHFCE, the impact of the new series is very small. Further details about the new component are given in the article Methodological Changes to the Measurement of Trade due to the Introduction of New International Standards published on 10 th June Improvements to actual and imputed housing rentals Changes have been made to the method for calculating current price housing rentals data in HHFCE. The impact is shown in Table 1, column g. The largest impact is the 7.6bn upwards contribution to revisions in This equates to an upward revision of 0.8% to the level of total HHFCE. It was previously announced, with the publication of the Q Consumer Trends, that the Office for National Statistics (ONS) was introducing a new method for deriving housing rental data in the calculation of HHFCE. This is in order to more closely align the annual growth (quarter on corresponding quarter of the previous year) of household expenditure on actual and imputed rentals with the annual growth of comparable CPIH data series CPIH is a measure of consumer price inflation that includes owner occupiers housing costs (OOH). This method was previously implemented for growth into Q with publication of the Q GDP estimates. With publication of Quarterly National Accounts consistent with Blue Book 2014, this method is now implemented for growth into Q To achieve this, 2010 data has been adjusted and is used to link the old basis data using the Living Costs and Food Survey (LCF), with the data based on relevant CPIH data (including OOH). The changes do not affect HHFCE chained volume measures. Current price estimates prior to 2010 are also unaffected. For a detailed explanation of this change see the article published on 3 rd September 2014: Changes to National Accounts: Revisions to household expenditure on rentals to align with the consumer price index with housing. This article also covers the future plans for the rental series in Blue Book Car list prices As a result of ensuring comparability in measuring GNI across EU countries, ONS has introduced improvements to the current price data for consumer spending on new cars. This is included in COICOP (purchase of motor cars). The improvements are to ensure the estimates capture the discounts negotiated by customers and the value of any accessories included at the point of sale. Growth in the chained volume measures is unaffected because the chained volume measures are based on numbers of cars sold, which means they are not affected by price discounts. Office for National Statistics Page 12

13 The current price improvements have resulted in downward revisions in all years from 1997 to 2012 and these are shown in Table 8. On average, they equate to downward revisions to COICOP (sale of motor cars) of just over 1% between 1997 and Table 8: COICOP (purchase of motor cars), impact of car list price improvements (current prices, million) COICOP Blue Book 2014 data Total Of which revisions due to car list prices million million A full explanation of the change is given in the article Revised Methodology and Sources as a Result of Addressing Gross National Income Reservations published on 29 th May Supply and Use balancing/npish improvements Supply and Use balancing Supply and Use balancing takes place annually to ensure that estimates of UK gross domestic product (GDP) are balanced across the Production, Income and Expenditure approaches. Further details are given in Annex A but, in essence, Supply and Use balancing reconciles the estimates from each of the approaches, taking into account the relative strengths of each. Supply and Use product balancing takes place at Classification of Office for National Statistics Page 13

14 Products by Activity 2008 (CPA 2008) level and the estimates produced are matched to COICOP products, reallocating total balanced HHFCE across COICOP categories. For Blue Book 2014, Supply and Use-balanced estimates of GDP for 1997 and 2011 were revised and data for 2012 went through the process for the first time. For 1997 to 2009, there was a reassessment of the balancing adjustments to take account of improvements to methods only. For 2010 and 2011, balancing adjustments were reassessed to take account of improvements to methods and later survey data, including updated data from ONS s Annual Business Survey (ABS) NPISH improvements The improvements to methods with the biggest impact on Supply and Use balancing were those for Non-Profit Institutions Serving Households (NPISH). As part of the changes from ensuring comparability in measuring GNI across EU countries, there has been a review of NPISH data throughout the National Accounts. The new NPISH data are of higher quality as they are based mainly on administrative sources, such as charities sector regulators. Output of NPISH is generally consumed by households and so contributes to HHFCE. In some categories, the improved NPISH data implied different levels of HHFCE from those previously published. To address this, HHFCE has been brought closer into line with the NPISH data as part of the Supply and Use balancing process. As a result, there are upward revisions to current price HHFCE levels in all years from 1997 to 2012 (see Table 1 column c). The largest is in 2011, when the 13.7bn upward revision from the NPISH improvements adds 1.4% to total HHFCE. These current price changes have a direct impact on chained volume measure growth, with the largest impacts being in 2008 to See Table 2 column c. At component level, the COICOP categories most affected include: 12.7, Other services not elsewhere classified, , Cultural services, which includes theatres, museums and galleries, , Maintenance and repair of personal transport equipment, and 10.4, Tertiary education. Full details of the improvements to the data for NPISH are given in the article Revised Methodology and Sources for Non-profit Institutions Serving Households published on 29 th May Other Supply and Use revisions The most significant non-npish related revisions from Supply and Use balancing are due to later source data for 2010 and 2011 and 2012 going through the process for the first time. These other Supply and Use revisions are contained in Other revisions (column h) in Office for National Statistics Page 14

15 Tables 1 and 2. They include upward revisions to the balancing adjustments to insurance (COICOP 12.5) in all three years. 5 Developments affecting quarterly data in Blue Book 2014 Revisions to quarterly aggregate HHFCE values are largely driven by the developments affecting the annual data explained in the previous sections. There has also been a review of the seasonal adjustment of the HHFCE data and this has caused some additional revisions to quarterly seasonally adjusted paths. Comparisons of Blue Book 2014 and previously published quarterly seasonally adjusted growth for total HHFCE (national concept) are shown in Figures 3 and 4. The average revision to quarterly current price growth between 1997 Q2 and 2012 Q4 is zero. Within this, revisions range between +1.0% (in 2010 Q1) and -1.0% (in 1999 Q2). The average revision to quarterly chained volume measure growth over the same period is also zero. Revisions to chained volume measure growth range between +0.8% (in 1999 Q3 and 2003 Q3) and -0.7% (in 1999 Q2). Office for National Statistics Page 15

16 Figure 3: Quarterly HHFCE growth rate: Comparison between Blue Book 2013 and previous estimates (current price, seasonally adjusted) per cent Revisions 2014Q1 Blue Book Q4 2012Q2 2011Q4 2011Q2 2010Q4 2010Q2 2009Q4 2009Q2 2008Q4 2008Q2 2007Q4 2007Q2 2006Q4 2006Q2 2005Q4 2005Q2 2004Q4 2004Q2 2003Q4 2003Q2 2002Q4 2002Q2 2001Q4 2001Q2 2000Q4 2000Q2 1999Q4 1999Q2 1998Q4 1998Q2 1997Q4 1997Q Figure 4: Quarterly HHFCE growth rate: Comparison between Blue Book 2013 and previous estimates (chained volume measure, seasonally adjusted) per cent Revisions 2014Q1 Blue Book Q4 2012Q2 2011Q4 2011Q2 2010Q4 2010Q2 2009Q4 2009Q2 2008Q4 2008Q2 2007Q4 2007Q2 2006Q4 2006Q2 2005Q4 2005Q2 2004Q4 2004Q2 2003Q4 2003Q2 2002Q4 2002Q2 2001Q4 2001Q2 2000Q4 2000Q2 1999Q4 1999Q2 1998Q4 1998Q2 1997Q4 1997Q Office for National Statistics Page 16

17 6 Future plans 6.1 Long-run HHFCE data The 2014 Q2 Quarterly National Accounts data set, published on 30 th September 2014, includes Blue Book 2014 consistent time series for high-level HHFCE components (current price and chained volume measures) back to Following the publication of the 2014 Blue Book on 31 October 2014, ONS will release consistent time series for more detailed HHFCE components published in the Blue Book and in Consumer Trends. The historical time series include back-casts of the new illegal activities series (and other Blue Book 2014 changes to sources and methods). Further details on the compilation of the historical series are available on request. 6.2 Continued development ONS plans a number of developments to the HHFCE statistics over the next few years. To underline its commitment to this programme, ONS has set up a separate team, dedicated to the development of economic and financial statistics for households. Planned developments include: Further improvements to the sources and methods for actual and imputed rental on dwellings. This work is already under way and is planned for implementation in the Blue Book 2015 data set. The improvements will affect both the current price series and volume measures. The improvements will affect expenditure, income and production components of the National Accounts. Further development of the data for illegal activities. This will include independent reviews of ONS s new sources and methods. A continuing rolling review programme to evaluate and improve the data across all categories of HHFCE. As already stated, priorities for this work include gambling and satellite and cable TV. 7 Conclusion This technical article sets out the improvements introduced into the HHFCE dataset as part of Blue Book 2014 production. It has given an overview of the improvements to sources and methods that have been introduced in the Blue Book 2014 data set. These improvements (as opposed to later data for existing sources) are the main driver of revisions in current price and chained volume terms. The largest impacts are from the introduction of the new series for illegal activities, the improvements to data for Non-Profit Institutions Serving Households (NPISH) and the improvements to FISIM and pensions. Office for National Statistics Page 17

18 The article has also given an overview of the Supply and Use balancing process and its impact on the Blue Book 2014 data set. The article sets out some important HHFCE developments planned for Blue Book 2015 and beyond. 8 Contact information Hugh.Skipper@ons.gsi.gov.uk Background notes 1. A list of those given pre-publication access to the contents of this article is published as part of this release. 2. Details of the policy governing the release of new data are available by visiting or from the Media Relations Office media.relations@ons.gsi.gov.uk 3. This article does not cover the historic (pre 1997) total HHFCE national concept data released with the Quarterly National Accounts, Q These current price and chained volume measure data (seasonally adjusted) are available annually from 1948 and quarterly from References Skipper, H and Williams, R(27 June 2013):Blue Book 2013: Improvements to Household Expenditure Estimates, ONS Correspondence table: COICOP 1999 CPA 2008, (1 December 2009),EUROSTAT Definition of Classification of Individual Consumption by Purpose al_consumption_by_purpose_(coicop) Definition of Classification of Products by Activity - Copyright Crown copyright 2014 You may use or re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or psi@nationalarchives.gsi.gov.uk This document is also available on our website at Office for National Statistics Page 18

19 Annex A - The Supply and Use balancing process Supply and Use tables provide the framework for ensuring supply and demand estimates in the National Accounts system are consistent. They are compiled annually at current prices and use data from the Production, Expenditure and Income approaches to GDP (Gross Domestic Product), taking account of the relative strengths of each. The aim of Supply and Use balancing is to produce a coherent and balanced estimate of GDP in current prices. The Supply tables explain how products are supplied in the domestic economy. The Use tables explain how products are consumed in the form of intermediate and final expenditure by sector. They are compiled based on two identities which together state that total supply in the economy is equal to total demand in the economy. As a component of the expenditure approach, HHFCE estimates, along with other expenditure components, are balanced so they equal the production and other supply side estimates. Supply and Use tables are produced for each industry and for each product within the economy. The 2014 Blue Book data publishes the National Accounts consistent with the UK Standard Industrial Classification of Economic activities 2007 (SIC 2007) and the Classification of Products by Activity 2008 (CPA 2008). Office for National Statistics Page 19