Did Britain's Prime Minister 'Leak' GDP Data?
Assistant News Editor, CNBC.com
British prime minister David Cameron is the latest European politician to be accused of leaking sensitive data after he promised "good news" for the U.K. economy would keep on coming, a day before the official release of growth statistics.
Cameron told U.K. lawmakers on Wednesday the economy had been improving and that "the good news will keep on coming." The British pound rose 0.46 percent against the U.S. dollar after his comments.
On Thursday, the U.K.'s Office of National Statistics released third-quarter gross domestic product (GDP) data that showed the economy expanded 1 percent over the previous quarter, the best quarterly growth in five years. The results were much better than economists' forecasts of 0.6 percent — and the report led to a 0.63 percent gain in the pound against the greenback.
Cameron's comments came during a heated debate with opposition leader Ed Miliband, who accused the prime minister of having a "bad week."
Cameron responded by saying, "I can tell you, the good news will keep on coming," a statement that was seen as a hint to Thursday's GDP numbers. (Read More: Britain Leaves Recession, Strongest Growth in 5 Years.)
The opposition Labour party called the prime minister's remarks "shambolic and wrong" and the U.K. Statistics Authority announced it will launch an investigation into whether Cameron broke the law that strictly forbids the release of embargoed economic data.
Economists told CNBC that although they are willing to give Cameron the benefit of the doubt, the issue raised questions over whether politicians should be privy to such data before it is released.
"Frankly, I think the ONS [part of the U.K. Statistics Authority conducting the investigation] are wasting their time," Neil MacKinnon, chief economist at VTB Capital, told CNBC.
"You could say, strictly speaking, that Cameron hasn't leaked any data. He hasn't been specific over the numbers and doesn't imply anything over the GDP release … I think the opposition are making hay out of this."
MacKinnon said that when he worked as an economist in the U.K.'s Treasury department, it was normal to have data two or three days before it was released.
Officials at the prime minister's office in Downing Street declined to say whether Cameron had seen the data beforehand and denied that he had broken the rules, insisting that his comment was referring to good news "in general," after previous positive data showing rising employment and falling inflation.
Official Response Is Plausible
Ruth Lea, economic advisor to Arbuthnot Banking Group, told CNBC that the official response was plausible.
"I think [he can get away with it]. The retail sales have been better, the public finances figures have been better and the latest RPI figures (retail price index) were better — there's been several bits of good news. But there was an implication in what he was saying that the GDP figures would be better as well," Lea told CNBC's Europe's "Squawk Box." "Perhaps he should have been a bit more careful, but I don't think it's a hanging offence."
Whether intentional or not, Cameron's gaffe has created questions over politicians' access to data. Andrew Dilnot, chairman of the U.K. Statistics Authority, has argued strongly against pre-release of statistics to ministers.
Jonathan Portes, director of the National Institute of Economic and Social Research (NIESR), agreed that it was not best practice.
"More broadly, this is always a danger — which is a strong argument for ending the practice where politicians see the statistics in advance. It isn't best practice and doesn't happen in many other advanced economies," Portes told CNBC.
The storm around Cameron's remarks come just a day after Reuters reported that the French Prime Minister Jean-Marc Ayrault had potentially revealed market-moving information on European aerospace giant EADS.
Speaking to Airbus factory workers after a trip to Asia to drum up foreign business, the French prime minister said Airbus had "signed an order for 15 aircraft and took options for the A350 and possibly the A380." His comments seemed to reveal a new plane order that hadn't been made public by Airbus. (Read More: Did French Prime Minister Accidedentally Reveal Big Airbus Order?.) Shares in EADS gained 2.82 percent on Wednesday after Ayrault's comments.
Human Error to Blame
In Britain, it is well known that the prime minister receives the GDP statistics 24 hours before they are published. Indeed, Cameron's statement in Parliament drew cheers from members of his Conservative party.
But Jonathan Portes of NIESR told CNBC that human error cannot be discounted.
"It is important to be clear that revealing, even implicitly, anything about official statistics in advance of their official release is not just against the "rules", but against the law; the Prime Minister is well aware of that," he told CNBC on Thursday. "So while the PM may or may not have done so inadvertently, I cannot imagine he did so intentionally."