Last month it was announced that UK unemployment had fallen to 6.9% with average earnings up in the last three months by 1.7% compared to the previous year. This is obviously good news for the economy, but I wonder if these changes will be visible in daily life?
For job hunters, in theory, this is great news. The economic growth is due to both increased demand as well as increased productivity across the UK. This increase in demand should lead to even more jobs available and further driving down unemployment. This increased productivity is also great for the UK when it comes to international trade and this allows wages to rise without fueling a rise in inflation. Great news!
Inflation has been recorded at 1.6%, down on last month’s figures. This is all good news for the average resident in the UK, with earnings (apparently) on the up and inflation falling we should all feel slightly better off. But do you notice it? Is your loaf of bread a couple of pennies cheaper? Has your weekly fuel cost dropped? Okay, so maybe you won’t be feeling the difference yet, but hopefully we all will be soon. However, an increase in demand tends to lead to demand-pull inflation (unless productivity continues to rise too) and therefore goods costing more. So it’s all relative really and you’re not going to be able to go buy a snazzy sports car next month, unless you’re lucky enough to win the £72 million on the Euromillions tonight. Wish me luck!