Spending on illegal drugs and prostitution was worth an estimated £12.3bn to the UK economy last year, according to figures from the Office of National Statistics (ONS).
The report found that the average impact of the purchase of narcotics and prostitution on household expenditure in the UK between 1997 and 2013 was an estimated £11.1bn a year over that period.
It also estimates that the impact of the two so far this year is around £6.1bn for the first two quarters.
It is the first time prostitution and the sale of illegal drugs – including heroin, crack cocaine and home-produced cannabis – have been included in spending figures in the UK.
Household spending has been rising every quarter since the third quarter of 2011 and is up 2.1% in the second quarter this year compared to the same period in 2013.
The ONS study found that the UK economy grew 0.9% in the second quarter of 2014, higher than the estimated 0.8%.
Earlier this month, it revealed that the recession in 2008 and 2009 was not as deep as previously thought, with a “peak-to-trough” contraction of 6%, rather than 7.2% as previously thought.
That meant the recovery up until 2012 was quicker, the ONS said.
A Treasury spokesman said: “Today’s news that growth has been revised up for the past quarter is further evidence that the Government’s long-term economic plan is working.
“The figures also confirm that growth has been stronger under this government than previously thought; with the economy now 2.7% above the pre-crisis peak.
“But the job is not done and so we will carry on working through our long-term economic plan that is delivering a brighter economic future.”