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Jubilee Effect Distorts Data
Caution needed over interpretation of Q2 and Q3 data
Extended holidays taken over the Queen's Golden Jubilee celebrations have made interpretation of a number of headline statistics more difficult.
The Queen's celebrations included replacing the usual May Bank holiday with a two day Golden Jubilee Bank holiday on the third and fourth of June. These holidays and associated additional time taken off appear to have had a significant impact on a number of headline statistics.
The charts illustrate the impact of the Jubilee on monthly statistics for manufacturing and service output. In June the index of manufacturing (IOM) fell by 5.4 per cent and the index of services (IOS) fell by 1.8 per cent. Both indices then recovered to more normal levels in July, with the IOM increasing by 5.0 per cent and the IOS by 1.8 All the main manufacturing industries appear to have seen a similar impact, in the service sector the impact appears to have been concentrated in the distribution, business services and finance industries.
The most important impact of these effects is on the measured growth of GDP. Latest figures show growth accelerating from 0.6 per cent in the second quarter to 0.9 per cent in the third quarter. Without the effect of the Jubilee the data would not have shown an acceleration but a deceleration in growth. ONS estimate that GDP quarterly growth would have been between 0.8 and 1.3 per cent in the second quarter and between 0.2 and 0.5 per cent in the third quarter.
The precise extent of the effect depends on the extent to which the output fall in the Jubilee month reflected lost output, or output that was re-scheduled to other months.
Effects may not have been limited to GDP, total weekly hours worked also showed weakness in June.