Courtesy of Huff Po:
George Osborne’s austerity message is set to be dented by the government’s own statistics body, as it prepares to adopt new calculations that mean the UK’s public sector debt will be £100 billion greater than estimated.
The Office for National Statistics will bring in the new calculation this autumn as part of sweeping changes that include estimating illegal activities like prostitution and drug dealing as worth £10 billion to the country’s national wealth.
The UK’s debt will effectively increase from well over £1 trillion by more than £100 billion, or 7.3% of GDP, as the ONS attempts to improve its accounting standards changes introduced by the US, Canada and Australia.
The ONS will bring Network Rail’s debt onto the UK’s books and also stop classifying the state’s stakes in the Royal Bank of Scotland and Lloyds as liquid assets that can be sold off quickly.
But in good news for the coalition, the ONS will give the UK’s GDP a boost of up to 5% (£75 billion) by reclassifying research and development as capital spending rather than a cost of production Continue reading