In news that has surprised economists, the UK’s wage growth has slowed, while the levels of unemployment have risen.
The Office for National Statistics (ONS) has revealed that wage growth was at 2.4 per cent for the three months to June, compared to 3.2 per cent in the three months to May. While experts had predicted a slight levelling-off in the rate of increase, their prediction had been for 2.8 per cent.
The country’s unemployment figures stood at 5.6 per cent for the three months to June, an unexpected rise from the 5.5 per cent of the three months to May. This change is the first rise in the quarterly unemployment figures since the beginning of 2013.
Overall, this means that there are 1.85 million people out of work in the UK, up 25,000 from the first quarter of 2015.
ONS statistician David Freeman said: "This is now the second consecutive time we’ve reported fewer people in work on the quarter. While it’s still too early to conclude that the jobs market is levelling off, these figures certainly strengthen that possibility. Growth in pay, however, remains solid.”
It has been suggested that the fall in wage growth and employment may only be a temporary dip that does not affect the chances of a successful economic recovery, even if it was not expected.
Interest rates kept at 0.5%
In the Bank of England’s statement on interest rates last week, Governor Mark Carney said that employment figures and wage levels would play an important role in deciding when the country was ready for higher interest weeks.
As part of his quarterly inflation report, he announced that the bank’s monetary policy committee had voted eight to one to keep interest rates at 0.5 per cent for the present - the 78th consecutive month the level has been held at an historic low.
Wage rates and employment figures will now be closely scrutinised for the rest of the year, which is when Mr Carney suggested that the organisation would raise interest rates again.
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