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UK news 2015: Overview of factors affecting UK economy.

UK News 2015: Unemployment rates

Major providers of economic UK news 2015 announced that the unemployment rate fell to 5.2%. However, wages were increased by only a few percent.

One possible explanation is that, with inflation close to zero, employers do not feel compelled to raise wages because workers’ living standards are rising anyway.

Average wages could also be slowing down, because more young people are finding jobs, skewing the composition of the workforce towards the lower-paid employment.

There could also be many other softening issues in the labor market than the UK unemployment rate. Salaries usually increase, when the joblessness rate is low, because employers have a hard time to attract employees. Indeed, nearly 16 per cent of part-time employees state that they would like a full-time job, suggesting there is still a large pool of labor in Britain.

Some economists predict wages will accelerate as the remaining slack disappears and inflation starts to rise sharply. Many sources provide evidence that the UK is not in the best economic health at the moment. The latest statistics show the poor state of the UK economy as the unemployment rate has risen to a 16 year high. From early December the number of unemployed has risen by a large margin of nearly to 2.67 million. This 8.4% UK unemployment rate is unusually high for the country.

The number of redundancies is rising as well. In the last quarter of 2015 164,000 workers have been made redundant. But, the UK government said that the economy is finding a solution, despite continuing economic problems.

UK News 2015: GBP rates

We think, that politicians and union officials will want you to believe that spending more money is going to be the best way out of the current crisis. Unfortunately, the history has shown us that the only way out of the mess is to restructure the economy in a proper way, so that the UK economy is able to be on equal terms with other developed countries once again. This won’t be an easy and pain free process.

Currently, the news also reported the trade balance decline. Declining oil prices led to a drop in imports rather than exports. We can see a tendency of falling export figures confirm this. Total imports decreased 1.8 percent to GBP 45.38 billion. Exports shrank almost 1.2 percent to GBP 42.2 billion.

Usually the exporting and importing of goods from Britain is centered on cooperation with the EU, but equality of this performance was significantly reduced in 2015. Shipments of products to countries outside the EU went down by GBP 0.1 billion. This is due to a GBP 0.3 billion reduction in exports of finished manufactured goods, offset by a GBP 0.2 billion improvement in exports of oil.

The next major issue is that UK inflation moved up to a yearly high in late December. As a standard, inflation is considered to be a constant increase in price levels of general goods and services. When we have high inflation, every penny you have in your pocket buys a smaller quantity of goods or services, compared to an earlier period. UK inflation be an issue pressuring British consumer in the year to come as well.

By Chieffinancing 25.07.2016

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