The Office for National Statistics (ONS) had said yesterday that the British economy is about five per cent higher than previously thought.

The authorities have changes the measures for business investment and pensions savings and this has resulted in recalculations. As per the new mechanisms, the economy is larger than earlier estimates, according to ONA. Firms' research and development will now be considered as capital investment and this will addaround £25 billion to nominal GDP each year.

The government will also count the contributions to its workers' pensions as future pay-outs are not included in the official figures as the amount is paid over several decades. However, under the new rules, government will have to treat the pension liabilities much like private firms in the UK. The government's wage expense is also expected to rise after the new rules are implemented. The change would have added £2.5 billion to government spending.

Under the new laws, the people in the UK save more than has previously been estimated. The government will consider funded, defined benefit pension schemes as savings. The changes will add about 5.5 per cent to the measure or about £75bn of the total.