§ Lord Kennet
asked Her Majesty's Government:
Whether the activities of those working in financial markets count as productive "work" to be included in measurements of gross national product for use either within the United Kingdom or by international organisations; and how recent activities in financial markets in East Asia figure in measurements of national "growth". [HL41]
§ Lord McIntosh of Haringey
The information requested falls within the responsibility of the Chief Executive of the Office for National Statistics who has been asked to arrange for a reply to be given.
Letter to Lord Kennet from the Director of the Office for National Statistics, Dr. Tim Holt, dated 22 January 1998.
I have been asked to reply, as Director of the Office for National Statistics (ONS), to your recent question on financial markets.
The UK's estimates of gross national product (GNP), which are compiled to international standards and definitions, do include estimates for the output of those working in financial services including the financial markets. In accordance with these definitions, the estimates include financial companies' gross trading profits but these exclude securities dealers holding gains and losses from trading in securities. Therefore, the fall in the value of the East Asian stock markets should not affect GNP estimates directly.
Economic activity which takes place outside of the United Kingdom will only be reported indirectly via the balance of payments. These accounts cover trade in goods and services, investment income from foreign 259WA direct or portfolio investment and interest from bank loans and depositis, as well as the financial transactions underlying such trade and in vestment. However, no estimates exist on the llikely impact of recent events in East Asian financial markets on the UK's balance of payments.