(Bloomberg) — Britain’s banks may be putting extra money aside to cover bad loans due to confusion around the country’s faulty labor market data.

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Lenders use the unemployment rate alongside other metrics including GDP, property prices, inflation and interest rates, to try to project how many people will default on their loans. However, the UK’s Office for National Statistics has been struggling to collect sufficient and accurate data on employment trends, leading to severe criticism from central bankers and politicians.

HSBC, Barclays, Lloyds and NatWest had £21.8 billion ($27.6 billion) of provisions set aside globally at the end of last year to cover debts that could sour. In an interim report earlier this year, HSBC highlighted a risk to its projections from “estimation and forecast uncertainty for UK unemployment given ongoing methodology updates at the UK Office for National Statistics.” Lloyds also singled out the unemployment rate as a “key source” of credit-loss uncertainty in its latest annual report.

Barclays added £102 million to its loss provisions, according to an October report, largely to account for economic uncertainties, including the amount of pressure on customers at risk of default. NatWest allocated £123 million related to economic uncertainty to its retail banking loss provisions in the latest quarterly release. These top-ups may not be related to issues with employment data.

Still, any problems within the calculations used to underpin banks’ provisions “could make them more risk averse than they need to be and so constrain their appetite to lend, thus holding back economic growth,” said Gary Greenwood, an equity research analyst at Shore Capital.

John O’Hanlon, emeritus professor of accounting at Lancaster University, said that questionable data would be likely to lead to “increased caution on the part of banks in the measurement of their credit-loss allowances, which might cause those allowances to be higher than they would otherwise be.”

Barclays, NatWest, HSBC and Lloyds declined to comment.

Blind Spot

Across the economy as a whole, any impact on growth is likely to be limited. However, the lack of reliable unemployment data remains a major blind spot for the UK’s financial sector. Bank of England officials have been struggling to assess the tightness of the jobs market as they face key decisions on how quickly to reduce interest rates without stoking inflation.

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