Record employment figures shouldn’t mask cost of living

The number of people employed in Britain increased by 180,000 in the last three months of 2019, according to the Office for National Statistics.

This means that approximately 33 million people in the UK are now employed – a record high says the ONS – with the unemployment rate at the joint-lowest level since early 1975.

Reacting to the news, CVR Global Associate Director Tom Gardiner said: “While this is encouraging news for the UK economy, we must not let this mask the fact that the cost of living is becoming increasingly difficult for a lot of people.

“The cost of living is going up and people’s ability to spend is receding, because during the period of the financial crisis, inflation rose faster than wages, and wages are only just now recovering to the pre-crisis level, which means in real terms they are lower.

“To emphasise this further, in the last three months of 2019 the ONS recorded 0.1 per cent growth in household spending – the weakest growth in four years, while output growth stood at zero per cent in the final quarter of 2019 versus the previous quarter.

“That said, retail would be one of the first sectors to feel the benefit of a bounce in consumer confidence, and retail sales figures from the ONS this month saw a 2.1 per cent  year-on-year rise in the value being spent – a sign of things to come, perhaps, now we have some confidence-boosting political certainty?

“If we are in an economic recovery then it is a very delicate one, and until real wages rise further, then people in employment, especially those who have recently just re-entered the world of work, aren’t going to feel the benefits.  This could also adversely affect the economy in terms of consumer confidence and retail spending.”

CVR Global is available to give financial advice to individuals or businesses in financial difficulties.