Summary
We identify the key building blocks necessary for reconstructing historical national accounts data and other useful macroeconomic statistics for the UK. We particularly focus on the last hundred years. A dataset of existing historical macroeconomic statistics – A Century of UK Economic Trends – has been assembled alongside an inventory of existing data sources. This resource has already enabled comparison of the productivity puzzle of the late nineteenth and early twentieth centuries with that since the Great Financial Crisis, which showed many similar measurement issues, and the establishment of a new business cycle chronology for the UK back to 1700. It has also led to the development of a historical UK data repository as a spin-off project undertaken jointly with the ONS and the Bank of England.
Overview
ONS has wanted for some time to make historical UK national accounts data more easily accessible to researchers. This would match the standards of provision of other statistical offices, such as those in the Netherlands and the US. Restoring the broader UK historical macroeconomic dataset, along the lines of the discontinued Economic Trends Annual Supplement, was also felt to be highly valuable, especially the provision of quarterly and monthly macroeconomic time series over the past hundred years. The first aim of the project was to draw up an inventory of existing historical national accounts data and other macroeconomic and financial time series covering the past hundred years. Where possible, the data has been made available in spreadsheet form for researchers to use. With the inventory established, the next aim was to take a view of whether (and how far back) it was possible to construct a comprehensive set of historical national accounts data consistent with the existing ESA10 system of national accounts. ESA 10 (The European System of National and Regional Accounts) is the newest internationally compatible EU accounting framework for a systematic and detailed description of an economy. The vast majority of ESA10 national accounts series only began in 1997.
Methods
The Bank of England’s Millennium Dataset was used to extract many historic macroeconomic and financial series. The Sefton and Weale balanced national accounts dataset covering 1920-1990 was also made available in spreadsheet form. The project also relied on the expertise of many ONS and academic colleagues who had worked with, and constructed, historical data. These colleagues kindly shared their knowledge and data sources with the project.
Findings
Reconstructing a set of historical national accounts on a consistent basis across sectors, products and industries remains a considerable challenge. This is despite the existence of the comprehensive historical accounts data compiled in the 1970s and 1990s based on earlier national accounting systems. The challenge arises from the large number of methodological changes that have been implemented since ESA95 was introduced in 1998. These changes were not retrospectively applied to many historical national accounts series prior to 1987, and in many cases not before 1997. So only a limited core set of national accounts data exists back to 1948 in the current ESA10 system. The length of time elapsed since many of the methodological changes makes a reconciliation exercise especially difficult and our inventory paper revealed just how much needs to be done to rectify this. However, a good start has been made by gathering the necessary raw materials. These have now been organised in a dedicated historical UK data repository undertaken jointly with colleagues at the ONS and the Bank of England.
Impact
Our inventory of macroeconomic data for the last century provides a resource for policymakers and economic researchers, offering solutions to linking older historical series to current official data across a range of macroeconomic variables. The project has attracted coverage by the BBC and the Financial Times. Our on-going work considers improvements to the UK national accounts data for the eighteenth and nineteenth centuries and a study to establish a business cycle chronology for the UK back to 1700, providing a consistent long-run chronology of record that will be a valuable resource to academics, journalists, policymakers and the wider public.
