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Response rates to a survey underpinning estimates of UK GDP and inflation rates have fallen in line with a decline in jobs survey, prompting the Office for National Statistics to take emergency action to ensure the quality of its numbers.

The statistics agency said it had put more interviewers in the field earlier this year to increase responses to its survey on living and food costs, in an effort to preempt problems. in class data caused by the collapse of the labor force survey (LFS). ).

Problems with the LFS have left policymakers unable to gauge the true state of the labor market – and the ONS says this key input for interest rate decisions may not be fixed until 2027 .

The cost of living and food survey, which collects information on household spending patterns and living costs, is an important input for economic measures.

The ONS uses it, along with other data sources, to compile GDP estimates and to weigh the basket of goods and services that underpin its consumer price indices, particularly the retail price index. . The latest GDP estimate will be published on Monday morning.

The survey is also the most comprehensive source of information for researchers and policymakers seeking to understand how the cost of living crisis affects households at different income levels, and the impact of changes in those taxes and benefits of living standards.

However, like the LFS, the response rate for the cost of living and food survey has declined over time, from 60 percent at the turn of the millennium to 40 percent in 2019.

It fell sharply when Covid lockdowns disrupted face-to-face interviews and hit a new record low of 22 percent in the financial year to 2023.

The number of responses from “co-operating” households in 2022-23 was just 4,061, a sharp drop from the sample of more than 5,000 that underpinned the results over the past five years.

Adam Corlett, principal economist at the Resolution Foundation think-tank, said the results based on 2022-2023 data, published in August, showed a decline in real-terms spending that looked “implausible” compared to national accounts data at the same time. .

Meanwhile, researchers are still waiting for the microdata that was made available to the ONS in September, but has been delayed until next year due to staff shortages.

“The whole world changed in February 2022 – and we still don’t have the data to see how it affects households,” said Peter Levell, senior research economist at the Institute for Fiscal Studies, adding that the new sources of electronic data are not a substitute for the overall view provided by the survey.

The ONS said it began expanding the sample for the survey in April, increasing the number of interviews carried out from around 900 in the first quarter of 2024 to around 1,240 in the third quarter. It also checks the test results against different data.

“Where the cost of living and food surveys feed the headline household expenditure estimates, their findings are triangulated with other sources, such as business surveys and trade data, to produce a strong picture of household spending patterns,” the agency said, adding that it could. begin checking results against card spending data as early as 2025.

Levell said the way the ONS used the LCF and other sources to produce the national accounts was “opaque” and that the delay in publishing the data was an “increasing issue” as policymakers used figures to assess the impact of tax changes on households.

The LCF feeds directly into the annual weighted RPI. It no longer has official statistical status, but it is used to calculate some index-linked bond repayments and student loan repayments and to set annual increases in train fares and telephone bills.

The survey often has a lower response rate than others carried out by the ONS, as it is unusually heavy. Respondents, including adults and children, were asked to write a diary for a two-week period recording their spending.

The Office for Statistics Regulation, which monitors the quality of UK statistics, flagged “significant” concerns about the quality of the LCF in 2022 and urged the ONS to “invest time and resources” in improving it.

It said in its review that a sample of 5,000 was too small for some users to draw “useful and robust conclusions”. The volatility of the data created “a risk of reputational damage” for the ONS because it could mean that real errors were not identified, the regulator added, with “a significant impact on price indices that using LCF data for their weights”.

The ONS acted at the time to address the most pressing problems, and the regulator said it provided adequate assurance of data quality. However, the ONS is making slow progress in “digitizing” the diary process — a new tool for scanning receipts will only be rolled out automatically from the end of next year.

Funding constraints have also delayed a longer-term plan to integrate the LCF with other surveys and create a single, streamlined source of data on income, expenditure and wealth.

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Spotify’s senior executives and board members are selling $1.25bn worth of the company’s stock by 2024 – including $900m in payouts for its two co-founders – as they take advantage of rising music streamer share price.

A total of $1.25bn was cashed out by around 20 executives and board members during the year, with stock sales rising in November and December, according to a Financial Times analysis of filings. US Securities and Exchange Commission.

Shares in Spotify, which is listed on the New York Stock Exchange, will almost triple by 2024, hovering close to a $100bn market capitalization. This is a sharp change from 2022 and 2023 when the group’s share price fell to an all-time low, trading at a market capitalization of less than $20bn.

Longtime employees and top executives are now reaping the financial rewards. Taken together, the co-founders’ transactions put their stock earnings at the top level of corporate leadership. Palantir founder Alex Karp and computer scion Michael Dell also made more than $1bn in sales this year, SEC filings show.

Some of Spotify’s share sales were executed in accordance with pre-arranged divestiture plans that typically involved chief executives being paid in company stock, while others were not, securities filings show. “As part of their long-term financial planning, several Spotify executives are selling some of their Spotify shares,” a company spokesperson said.

Chief executive Daniel Ek, who founded Spotify in Sweden in 2006 with Martin Lorentzon, has sold nearly $350 million worth of stock in 2024. He sold the shares on December 11, when he cashed out the $28 million. Bloomberg estimates Ek’s net worth at over $7bn.

Lorentzon, who remains on Spotify’s board, sold more than $550m worth of stock by 2024, per SEC filings.

Gustav Söderström, Spotify’s chief product and technology officer, who has been with the company since 2009, sold more than $106 million in stock in 2024.

Chief human resources officer Katarina Berg sold $38m worth of stock, while chief business officer Alex Norström reaped $63mn from stock sales during the year.

Dustee Jenkins, Spotify’s head of public relations, who joined the company from retailer Target in 2017, has sold more than $6m of stock this year.

Netflix chief executive Ted Sarandos, who has sat on Spotify’s board since 2016, made $6 million from selling his Spotify stock this year.

Spotify and Netflix are ahead of their competition in music and television, emerging as the undeniable winners of the “streaming wars”.

Wall Street rewarded Ek for a newfound focus on profitability. After firing a quarter of its staff in 2023 and raising subscription prices, Spotify is profitable every quarter in 2024. It does so without sacrificing subscriber growth. The streaming group continues to add customers at a rapid pace, even as it raises prices in many countries.

Bank of America analysts in November raised their stock forecast for Spotify, noting “unbelievable” profit margin performance this year.

“Spotify has long had an incredibly strong product offering and growth opportunity,” Morgan Stanley analysts wrote. “In 2024, we start to see the opportunity for profit.”

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Agreed property sales in the UK jumped by almost a third in the year to the end of 2024 as buyers rushed to avoid a rise in stamp duty from next April, according to data from Zoopla.

The property portal research reported on Monday that there were 283,000 sales agreed but not completed as of December 14, the biggest sales gain in four years and up 30 percent by the end of 2023.

Buyer inquiries rose 21 percent in December compared to the same period last year. The company attributed both trends to the upcoming rise in stamp duty, set by chancellor Rachel Reeves in her October Budget.

Richard Donnell, executive director of Zoopla, said: “There is a large pipeline of sales to be completed in the first half of 2025 with many hoping to avoid higher stamp duty costs from next April.”

“Buyers and sellers returned to the housing market in 2024 with delayed moves in the face of higher mortgage rates,” he added.

Reeves confirmed in the Budget that a temporary stamp duty holiday will end in March. As a result, first-time buyers, for example, will start paying tax from April 2025 for properties worth £300,000 or more, instead of £425,000 currently.

Anticipation of changes to the stamp duty regime helped lift mortgage approvals to their highest level since August 2022 in October, according to separate data published by the Bank of England.

Matt Thompson, head of sales at Chestertons, said the estate agency had “seen one of the poorest Decembers in years in terms of buyer demand”.

“This is mainly driven by first-time buyers looking to get on the property ladder before stamp duty changes next year, but also by second-steppers including young families, that wants to rise,” he added.

UK house prices rose 3.7 percent year-on-year in November, the fastest annual growth since November 2022, according to separate data published by Nationwide in early December.

Zoopla reported a further acceleration in annual home price growth in December, compared to the previous month. But it also noted that buyers have become more price sensitive following the Autumn Budget and amid growing uncertainty over the outlook for mortgage rates.

Buyers paid an average of 3.6 percent below the asking price for a property in December, Zoopla data showed, up from 3.2 percent in the summer.

Mortgage rates have risen since November due to concerns about stubborn inflation, adding to expectations in financial markets that the Bank of England will be cautious about cutting interest rates next year.

The central bank held the benchmark rate at 4.75 percent last week, after two cuts since the summer. After the latest vote, BoE governor Andrew Bailey said there was “heightened economic uncertainty” meaning policymakers could not “commit when or by how much we will cut rates in the coming year”.

Zoopla expects UK house prices to rise by 2.5 per cent by 2025. Thompson predicts growth of 3.4 per cent, saying “improvement in affordability, pent-up demand and renewed confidence in the market should provide support for the steady growth of property values”.

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Sir Keir Starmer is to agree a “comprehensive” deal enabling young people to study and work in the UK and EU as part of next year’s “reset” talks aimed at easing barriers of trade, a leading UK business lobby group.

The call by the British Chambers of Commerce puts it at odds with the Labor government, which has repeatedly rejected signing such an agreement, despite EU negotiators making it clear that it would be an essential part of any agreement to improve trade relations.

A “youth activity” deal is one of 13 recommendations from a BCC report how to fix the UK-EU Trade and Cooperation Agreement. Both sides agreed in December 2020 that when Britain leaves the EU, it will lead more than 16,000 small businesses to completely stop trading with the bloc, according to analysis published this month by the London School of Economics.

Other requests include more flexibility for business travelers, a VAT co-operation pact, linking the EU and UK’s carbon trading schemes and joining a pan-European trade agreement on matter, known as the Pan-Euro-Mediterranean or “PEM” convention.

BCC director-general Shevaun Haviland said that while ministers have talked a lot about resetting trade relations with the EU, they now need to take concrete actions to boost trade and provide the their promise to promote economic growth.

“Our model shows that if exports grew 1 percent in 2024, compared to our forecast of a 2 percent contraction, then the economy could grow up to 1.7 percent instead of 0.8 percent. That’s a big difference,” he said.

“We need to see a smart and flexible approach to these negotiations. Our businesses are clear about what they want to see, less paperwork and bureaucracy, more flexibility in business travel and a balance method of youth mobility between the UK and the EU,” he said.

The demands from the BCC, which speaks for 53 chambers of commerce across the country, are far more ambitious than the prime minister’s current plans for a “reset”.

Although Labor promised in its election manifesto to “break down barriers to trade” in Europe, that goal was limited by a pledge not to rejoin the EU single market, customs union or return to free movement of people.

The ministers therefore limited the trade elements of the reset to three areas outlined in the manifesto: an agreement to ease visas for musicians, improved recognition of professional qualifications and a so-called veterinary agreement to ease border frictions for EU-UK trade in food. and plant products.

The negotiations, which are expected to start in mid-2025, are already shaping up to be difficult. The EU has previously ruled out a deal with musicians, demanding the politically sensitive “dynamic alignment” of EU rules for a veterinary deal and warning that no deal will be done without early approvals. concession of fishing rights in UK coastal waters.

But Haviland warned that the problems created by Brexit have not eased four years after the TCA came into force and in many areas “are getting worse” as a result of continued divergence between EU regulations and UK.

The BCC report, titled “A manifesto to reset UK-EU trade”, says member businesses continue to report that Brexit red tape covering customs, VAT and other burdens on regulation hinders their growth.

“Four years from the TCA negotiations, 40 percent of exporters actively ‘disagree’ that it helps them grow,” the report said, citing a membership survey conducted in summer 2024.

The survey also warns of the challenges of future EU regulations, such as the charging of carbon border taxes from January 2026, all of which will increase the bureaucratic burdens of trade.

“The awareness of future changes in trade rules and regulations made either in the UK or the EU is also alarmingly low, with more than three quarters of companies without knowledge of details of most laws,” the report said.

The government said it was “resetting relations with our European friends to strengthen ties, secure a broad security pact and tackle trade barriers.

“We are clear that there will be no return to the customs union, the single market or freedom of movement.”

Data visualization by Amy Borrett

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Nick Candy, the new treasurer of Nigel Farage’s rightwing Reform party, promised Britain “political disruption like we have never seen before” as he admitted that he has several other billionaire backers in addition to Elon Musk.

The property developer told the Financial Times that he “raised more money than any other political party” and that Reform had more members than the Conservative party in three months as it attracted disaffected voters. Tory and Labor voters.

“We have many billionaires willing to donate to the party, not just Elon,” Candy said. “The Reform Party is the disruptor – it’s the seed round, the series A. It’s going to be a political disruption like we’ve never seen before.”

“The oldest political party in the world will be overtaken by the youngest political party on the planet,” he added.

Many in Westminster fear that a financial intervention from Musk could have a significant and lasting impact on British politics, giving Reform the resources to transform itself into an established vehicle for power.

The party has just five MPs, but it came second out of 98 seats in the July general election, 89 of which were won by Labour.

After meeting with Musk this week at US president-elect Donald Trump’s Mar-a-Lago home in Florida, Farage said the Tesla and X owner was giving “serious consideration” to give a donation.

Foreigners can give money to UK political parties through British businesses they own, but are banned from donating directly.

The Electoral Commission, the UK’s election watchdog, is in discussions with the government about changing the law to ensure that only income generated in the UK goes to parties – a move supported by Sir Keir’s adviser Starmer on ethical standards.

Lucy Powell, leader of the House of Commons, confirmed on Sunday that the government will introduce legislation as early as next year to ensure political donations are “fair and robust”.

Candy, who arranged the meeting between Musk and Farage, said the US billionaire “will be the first of many wealthy donors to be legally allowed to donate”. He declined to name other billionaires who are willing to donate.

Candy, who defected from the Tories to Reform this month, has pledged to give at least £1m of his own money to the party. He said that the money obtained will be spent on “ground game, data analysis and polling” for a party that needs to build its infrastructure and system.

Describing Reform as having “more Conservative values ​​in its little finger than the Conservative party”, Candy said “Even the big Tory donors are calling me . . . More people are going to join us. It’s already started the movement.”

In November, Reform said it had surpassed 100,000 members. The Tory party has about 130,000 members.

Candy criticized the previous Conservative government and the current Labor administration for presiding over “the biggest brain drain the country has ever seen. Many people are disappointed. We are in serious decline and it must be stopped”.

The reform – which hopes to win hundreds of council seats in May’s local elections, and at least one mayoralty – has been dogged in recent weeks by a series of high-profile Tory defections. .

They include Tim Montgomerie, founder of the ConservativeHome website, and former Tory MP Dame Andrea Jenkyns.

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