U.K. Statisticians Tackle Virus Data Gaps With Inventive Tweaks

(Bloomberg) -- Drinks in pubs, self-raising flour and airfares are causing headaches for the U.K.'s Office for National Statistics as it battles to collect accurate inflation data amid the nation's coronavirus lockdown.

About one in five of the items usually used to calculated consumer price inflation are currently unavailable, meaning the indexes that are used to set everything from mortgage and pension payments to some gilt yields will likely be more volatile, the ONS said Wednesday. It will temporarily suspend its House Price Index.

Statisticians usually rely on a network of people across the country visiting stores each month to collect around 80% of prices included, but shutdowns, social distancing and shortages have all meant that they have had to reconsider. Instead, prices will be gathered online or by phone and over a longer period, it said.

Some goods, such as drinks in pubs, are no longer available at all because the market has effectively been frozen. These will be handled to ensure they have no impact on the overall index, while categories where the sample available is less than half its usual size will be marked in the release, the ONS said.

The impact on the Retail Prices Index -- which determines the payouts received on the U.K.'s more than 300 billion pound ($373 billion) index-linked gilt market -- has been examined by the Bank of England, which found none of the alterations were “materially detrimental” to bond holders.

The changes will take affect from the April indexes, most of which are due to be published on May 20, or, for house prices, on June 17, it said. The ONS is also considering an experimental index containing only goods that are available to buy.

The labor market survey is also affected by the lockdown, reducing response rates and increasing volatility in the data. The ONS is adding questions and opening up a new online survey. Workers that have been furloughed under the government's wage support plan will be counted as employed, it said.

“We are being as transparent as possible about the issues and how we are addressing them,” said Deputy National Statistician for Economic Statistics Jonathan Athow. “It is important to remember that these are truly unprecedented times, and there is scope for more revisions than normal.”