New labour force survey could be delayed to 2027 amid falling participation
The new labour force survey might not be ready until 2027, the Office for National Statistics (ONS) warned, as it continues to grapple with data difficulties.
Since the pandemic, the ONS has struggled with falling response rates to its flagship labour force survey (LFS), which has raised questions over the accuracy of its data.
Response rates to the LFS, which is conducted over the phone, have fallen from 39 to 13 per cent between 2019 and 2023.
To address these issues, it is trying to develop a transformed labour force survey (TLFS).
In an update on its work, the statistics agency cautioned that further work would likely be necessary due to “current quality concerns” over the new survey.
“Transitioning in mid-2025 is now unlikely,” the ONS said. “Aiming to complete this process in 2027 would allow us time to implement the shorter survey with further periods of parallel run.”
In the meantime, the ONS is attempting to improve the existing LFS by increase its sample size.
“During this period, there may be more instability in LFS estimates as they are likely to be affected by these collection changes, in addition to any underlying changes in the labour market,” it said.
The ONS said there were a “number of potential scenarios” for when it could transition to the TLFS. It said it would provide an update next spring.
Further delays to the TLFS will mean that policymakers continue to go without a complete picture of the UK labour market, which will be a particular concern for rate-setters at the Bank of England.
The tightness of the labour market is a crucial concern for policymakers as they weigh up how fast to cut interest rates in the new year.
The ONS also provided updated estimates on the labour market data, based on the latest population estimates.
It revised up the employment rate by 0.1 percentage points to 74.6 per cent, while revising down the inactivity rate by 0.1 percentage points to 22.1 per cent.
However, as a result of the larger work force, the ONS revised down its estimates for productivity growth. Its latest figures suggest growth in output per hour was minus 0.9 per cent between April and June compared to a year earlier, revised down from minus 0.3 per cent previously.