Constructing estimates for exports and the value-added from exports of monetary financial institutions in the UK

This technical paper outlines a methodology for constructing estimates of the value-added from exports of Monetary Financial Institutions (MFIs) in the UK. We present new and initial estimates giving a lower bound for the value-added component of MFIs exports generated directly by the domestic MFI (ISIC 64.10) subsector, called the direct domestic value-added component of exports. We also present a disaggregation of MFIs exports into EU and nonEU exports for the first time. Currently, published estimates on the value-added of UK trade are only available for aggregate financial services or even higher levels of industrial aggregation, and only with a lag and at an annual frequency. Our estimates are available at a quarterly frequency from 2014-2017 Q1. This methodology has been developed through collaboration between the Economic Statistics Centre of Excellence (ESCoE) and the Bank of England. Our estimates for MFIs are constructed using individual institution data held and aggregated by the Bank of England and the destination of exports is allocated using disaggregated product level data. These methods enable the value-added and exporting profile of each MFI to be considered and so better estimates are constructed than would have been the case if only aggregated data was used. Our initial estimates suggest that at least £14.6bn of the £38.2bn of MFI exports in 2016 was direct domestic value-added, of which £5.0bn is exported to the EU. We compare these new estimates with currently published data at a higher industry level. These estimates form part of a wider project conducted by ESCoE, the aim of which is to construct more highly disaggregated measures of value-added from trade for key sectors.