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UK inflation was overstated by 0.1 percentage points in April owing to an error in tax figures provided by a government department, the Office for National Statistics said on Thursday.
Annual inflation was 3.4 per cent, according to the corrected data, rather than the 3.5 per cent initially estimated. Economists polled by Reuters had expected a rate of 3.3 per cent, up sharply from 2.6 per cent in March.
The ONS said an error had been identified “in an extract of the licensed vehicles data provided . . . by the Department for Transport, used to calculate the April 2025 Vehicle Excise Duty component of consumer prices inflation”.
It said the incorrect data had overstated the number of vehicles subject to VED rates applicable in the first year of registration.
“No other periods are affected . . . The ONS will be using the correctly weighted data from May 2025’s figures onwards. The DfT’s published official statistics are unaffected,” it added.
In line with its revisions policy, it said, the April figure would remain at 3.5 per cent in its historic series.
The ONS noted that the error was isolated to one set of data used to calculate the VED index.
“However,” it added, “the ONS is reviewing its quality assurance processes for external data sources in light of this issue.”
The ONS has come under intense scrutiny over the reliability of its data, as long-running problems with a key labour market survey have raised doubts over key indicators such as unemployment, inactivity and productivity. Errors have also been found in its trade data.
“The trouble for the ONS is that this is part of a developing pattern of weakness which further undermines confidence in the organisation’s capacity to deliver accurate statistics,” said Tony Travers, a professor at the London School of Economics. “Given data and analytical advances in recent decades, this kind of failure is all the more problematic.”
Rob Wood, economist at consultancy Pantheon Macroeconomics, said that while budget restrictions had compromised the ONS’s ability to produce accurate statistics, “errors . . . are piling up and have now at one time or another affected all the real key economic statistics of inflation, unemployment and GDP”.
While the 0.1 point error in April’s inflation rate would not “make or break” the organisation’s credibility, it was “crucial that the ONS climbs the mountain of restoring trust in its statistics, which is likely a factor contributing to broader credibility of the bodies guiding the economy”, including the Bank of England’s Monetary Policy Committee.
Last month, the head of the statistics service Sir Ian Diamond stepped down citing “ongoing health issues” after a government-commissioned review launched an investigation in April into the leadership, culture and structure of the ONS.
The Bank of England has been vocal about its difficulties in deciding the path for monetary policy due to high uncertainty over official data.
BoE governor Andrew Bailey, when asked at the House of Commons Treasury committee on Tuesday about the impact of confidence in official data on the bank’s monetary policymaking, said: “It does have a bearing on it”.
“We certainly spend more time on it, and that’s obviously what we should do, given the uncertainty.”
On productivity data that showed a contraction over the course of 2024, Bailey told the committee there was “a puzzle”.
He added: “Negative productivity growth is associated with quite serious recessions. We didn’t have that last year. So there is a puzzle there . . . over exactly what the picture is, what the data are telling us.”
In April, the ONS said it would scale back its work in some key policy areas — including the measurement of public sector productivity and crime against children — to focus on core economic statistics.
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