The Office for National Statistics (ONS) has warned that the new labour force survey may not be ready until 2027 due to ongoing data difficulties.
Since the pandemic, the ONS has been grappling with declining response rates to its flagship labour force survey (LFS), leading to questions about the accuracy of its data, as reported by .
Response rates to the phone-conducted LFS have dropped from 39% to 13% between 2019 and 2023. To address these issues, the ONS is working on a transformed labour force survey (TLFS).
However, the statistics agency has cautioned that further work will likely be necessary due to "current quality concerns" over the new survey. The ONS stated: "Transitioning in mid-2025 is now unlikely," and "Aiming to complete this process in 2027 would allow us time to implement the shorter survey with further periods of parallel run."
In the meantime, the ONS is trying to improve the existing LFS by increasing its sample size.
It noted: "During this period, there may be more instability in LFS estimates as they are likely to be affected by these collection changes, in addition to any underlying changes in the labour market," The ONS outlined a "number of potential scenarios" for when it could transition to the TLFS and promised an update next spring.
Further delays to the TLFS will leave policymakers without a comprehensive understanding of the º£½ÇÊÓƵ labour market, a situation that could be particularly concerning for rate-setters at the Bank of England. The tightness of the labour market is a key consideration for policymakers as they decide on the pace of interest rate cuts in the new year.
The ONS has also provided updated estimates on labour market data, based on the latest population figures. It revised up the employment rate by 0.1 percentage points to 74.6 per cent, while revising down the inactivity rate by 0.1 percentage points to 22.1 per cent.
However, due to the larger workforce, the ONS revised down its estimates for productivity growth. Its latest figures suggest growth in output per hour was minus 0.9 per cent between April and June compared to a year earlier, revised down from minus 0.3 per cent previously.
