UK statistics office backs newer productivity measure for economy tracking
Britain's official statisticians are urging users to rely on a newer productivity gauge as concerns persist over weaknesses in the long-running labour force survey series. The recommendation points to a wider shift in how the UK economy is assessed, with the tax data-based measure showing stronger growth than the older survey-based indicator.
Highlights
- ONS recommends using the experimental RTI productivity indicator, which shows output per worker up 4.2% since 2019 versus 2.3% in the traditional LFS measure.
- RTI data reports output per hour worked rose 2.1% year-on-year in Q1 2026, compared to just 0.4% using the older LFS-based approach.
- New ONS productivity measure combining RTI, LFS, and employer survey data will release initial estimates by year-end, aiming to improve UK economic tracking.
Productivity measure shifts toward tax data
As reported by the Office for National Statistics, users should currently focus on its experimental real-time indicator, or RTI, approach as the best estimate of how productivity is changing in the UK economy. In a blog post, ONS Deputy Chief Economist Richard Heys says lower historic response rates for the labour force survey, or LFS, weaken confidence in the older productivity series.The RTI measure, introduced in August 2024, uses tax office data and shows output per worker is up 4.2% since 2019. That compares with a 2.3% increase under the older LFS-based measure.
The gap is also visible in more recent data. RTI figures show output per hour worked grows at an annual 2.1% in the first quarter of 2026, versus a 0.4% rise in the LFS measure.
Implications for UK economic analysis
Productivity growth in Britain slows after the 2008 global financial crisis, making the accuracy of official data especially important for policymakers and investors. Problems with the LFS, which is also used to calculate unemployment, have already raised concerns at the Bank of England.The ONS says response rates for the LFS have returned to near pre-pandemic levels, but earlier shortfalls are still affecting annual growth rates. It also says its advice to prioritise the RTI productivity measure does not extend to other datasets based on the LFS.
RTI payroll data has shown bigger falls in employment than the LFS survey, which in turn lifts measured productivity. The ONS is now developing a new productivity measure that combines RTI and LFS data with another employer survey, with initial estimates due around the end of the year.
In our earlier article on the upcoming UK–EU summit in Brussels on July 22, we outlined Prime Minister Keir Starmer’s push to reset relations with the bloc and deepen co-operation. We noted that negotiations were focusing on a youth mobility scheme, possible changes to tuition fees for EU students in the UK, and efforts to reduce trade barriers while positioning British firms within future “Made in Europe” supply chains.
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