The notion that one of the most closely watched central banks in the world may be determining interest rates using figures that are, to put it mildly, untrustworthy is subtly unsettling. Britain is currently in that situation. For the better part of three years, the Office for National Statistics, which is in charge of informing the nation about the number of people employed, their income, and the actual state of the economy, has been in various stages of crisis; if anything, things seem to be getting worse.
June 2026 saw the release of the most recent episode. The ONS acknowledged that staff members had been inadvertently diverted to a new replacement survey that was still being developed, resulting in an internal scheduling error that left too few interviewers assigned to its Labour Force Survey between May and early June. As a result, response rates for the impacted survey waves decreased by 19%. The agency cautioned that the error would probably “artificially dampen” data movements, making it more difficult to determine whether unemployment is truly increasing or decreasing based only on official statistics. That is a serious issue for an economy that already faces genuine uncertainty.
The depth of this is worth pausing to consider. A few Treasury economists do not consult the Labour Force Survey as a specialized dataset. It serves as the main lens through which the Bank of England, companies, and policymakers view the UK labor market. The Bank’s governor, Andrew Bailey, expressed real institutional concern when he brought up the data quality issue at Mansion House, which is a rather formal setting and not the place for dramatic complaints. “I do struggle to explain when my fellow governors ask me why the British are particularly bad at this,” he replied. That line hasn’t held up well over time.
The structural issues are years older than this most recent mistake. Prior to the pandemic, response rates to the LFS were already falling. They fell apart after Covid. The ONS once reported a survey participation rate of about 17%, which would have made most pollsters blush. Analysts discovered that the ONS may have been undercounting Britain’s workforce by almost a million people, which had a startling practical impact. Due to samples of only five respondents, monthly fluctuations in the data were approaching thirty percent for some age subgroups. The ONS was compelled to completely halt its monthly labor market release in late 2023, which ought to have sparked a more pressing national discussion than it did.
An organization that has been clearly having difficulties for years is the source of the data errors. According to a government-commissioned review, the workforce was dealing with below-average pay, a leadership dispute over remote working policy, a significant decline in morale, and an annual staff turnover rate of up to 25% among frontline survey workers. Finding and retaining qualified analysts has been extremely challenging due to the ONS’s Newport headquarters, which isn’t exactly a draw for data scientists considering London salaries. While core statistical functions declined, a flagship digital project cost £200 million over a five-year period.
Concern is increased by the leadership circumstance. At the moment, the ONS and the UK Statistics Authority have all three of their top positions open. Since Ian Diamond left, the position of national statistician has been vacant, and despite completed interviews, no permanent appointment has been made. Recently, a group of MPs called the situation “unaccountable musical chairs.” It is difficult to disagree with that description. Whoever ultimately assumes the positions will inherit a lack of credibility as well as a cultural repair task that is unlikely to be resolved quickly.
Many of these issues were intended to be resolved by the “transformed labour market survey” that replaced the LFS. The launch is now anticipated to occur in 2027. The Treasury select committee chair referred to that delay as a “major blow,” and it is difficult to disagree. Until then, the Bank of England, the Treasury, and every company attempting to understand the UK labor market will be using data that the producing agency itself has repeatedly flagged as unreliable and that everyone agrees is flawed. For a while, it is possible to get around faulty data. The concern is that it’s unclear how long “a while” can go before a truly consequential policy error occurs.
