Prostitution and drug dealing provide a £10 billion (R175bn) boost to the British economy, according to new research.

New European rules mean that illegal activities must now be included in official estimates of the economy’s size.

It means a booming sex trade or an expansion in cannabis factories will provide a boost to the treasury’s economic outlook.

Every three months the statistics office produces an estimate of gross domestic product. It covers all activity, from manufacturing and construction to agriculture, public services and tourism.

From autumn the figures have to include the value of the illegal drug trade, including the import, manufacture and sale of illicit narcotics, and the “provision of prostitution services”.

Based on 2009 levels, prostitution is expected to add £5.3bn to the economy and £4.4bn is attributable to illegal drugs.

In all years between 1997 and 2009 the impact ranged between £7bn and £11bn. The data will class growing or importing drugs as “production”, buying them for home use as “expenditure” and selling them as “income”.

The data cover crack cocaine, powder cocaine, heroin, cannabis, ecstasy and amphetamines.

In a note published yesterday, the statistics office examined how “UK cannabis production is not balanced” because “domestic output increases by the value of sales and this is the increase in supply”. – Daily Mail