Record Employment and Wage Rises Outstripping Inflation
Published / Last Updated on 13/08/2019
The Office for National Statistics (ONS) has published its latest UK labour market report with record employment in the UK despite Brexit concerns in addition, wages are rising faster than inflation.
The main points are:
- In the 3 months to June 2019, employment increased by 115,000 to reach a record high of 32.81 million and unemployment increased by 31,000 to 1.33 million.
- The employment rate for women increased to reach a record high of 72.1% in the three months to June 2019.
- The number of non-UK workers increased, driven by the number of workers with European nationalities.
- Total average weekly pay grew by 3.7% in the year to June to reach £538, and regular average weekly pay grew by 3.9% to reach £505 over the same period.
With employment high and wages rising faster than inflation, it can only mean one thing .... more inflation. If there are more people working with more money in their pockets, it means they spend more, meaning prices in the shops and property prices will start to rise again.
Peg that back with Brexit incertainty, it is merely postponing decisions on interest rates.
- If there is a No Deal Brexit, expect more uncertainty and employment to fall back but an ever weaker pound will mean food prices rise
- If there is a Deal Brexit, certainty will return, the economy will breathe and perhaps may overheat. Expect infltaion here too, but more linked to property, goods and services rather than food. Inflation = interest rate increases.