In an interview with the FT, Rob Kent-Smith, deputy head of the Office for Statistics Regulation (OSR) that there was “a way to go” before official jobs statistics could be re-endorsed by the watchdog.
The ONS has been contending with a falling response rate to its surveys, and Labour Force Survey (LFS) data was suspended in September 2023 due to quality concerns.
The Transformed Labour Force Survey (TLFS), which is intended to improve the reliability of the data, was scheduled to be released in March 2024, but the government announced on 5 Februaary that this would now be delayed to September.
In the interim, reweighted Labour Force Survey (LFS) estimates will be released to “respond to the user need for having wider labour market information that only the LFS is able to provide”.
Delaying TLFS has created uncertainty from the OSR on whether interim data sets based on the old survey will improve quickly enough to be relabelled as “accredited” official statistics before the TLFS rollout.
The data was reweighted by the ONS to reflect new population information.
On Tuesday (13 February) the ONS will release newly reweighted data for December 2023 and commence with the survey regularly. However, users were asked to be “particularly vigilant” in the coming months. The OSR is set to review the data and the actions of the ONS to improve it this week.
The absence of reliable labour market data poses a significant challenge for Bank of England policymakers, as they perceive wage pressures as a key risk factor that could sustain inflation above the target, potentially delaying a reduction in interest rates from the current 16-year high of 5.25%.
Although the BoE has created its own estimates for wage growth by using various alternative surveys, governor Andrew Bailey recently said that doubts over the LFS were “posing challenges” because there was “no real alternative” to assess unemployment.