29 May 2025
We have discovered an issue with the regional gross domestic product (GDP) deflation method, whereby our use of gross value added (GVA) implied deflators introduces a divergence from UK GDP growth in ‘real’ volume terms, particularly when GDP and GVA do not follow similar paths. This only impacts GDP volume measures, but it will affect all levels of geography in this publication. No GVA estimates, nor GDP in current market prices, are affected by the issue.
We have now implemented an improved deflation method, which uses GVA implied deflators to deflate total GVA but separately deflates taxes (less subsidies) on products using a UK-level implied deflator, and then chain-links the two parts together to create a chained volume measure of regional GDP that is consistent with UK estimates.
This method change has revised all regional GDP volume estimates in Tables 8 to 13 of the GDP datasets for International Territorial Level (ITL) regions, city and enterprise regions, and local authorities. It has also revised the main points, text and numbers in Sections 2 and 3, and text in Section 7 of the statistical bulletin.
