Good news for the purchasing power of the British. In the UK, average wages without bonuses registered a year-on-year increase of 7.8% in the April-June period. This is the fastest rate of increase since these data began to be recorded in 2001.
At the same time, inflation in the Canal reached almost 7.9% in July, the highest in the G7. In other words, real wages are beginning to stabilize where up to now they have been devoured by rising prices.
On the other hand, the rise in wages is enough to give the Bank of England (BoE) and its battle against inflation a “migraine”, estimate Michel Hewson, an analyst at CMC Markets, and Susannah Streeter, an analyst at Hargreaves Lansdown, also predicting a further tightening of interest rates by the BoE.
Social conflicts
In a study published this Monday, the CIPD human resources firm finds that 40% of British employers have been forced to make higher wage counter-offers to try to keep their employees, given the persistent shortage of labor since Brexit and the reopening of the economy. after the covid pandemic.
Expectations of a further rate hike sent the London Stock Market tumbling on Tuesday, with investors believing this would have a negative impact on the economy, especially construction. British households in particular saw the cost of their mortgages rise, when they were already facing dizzying bills.
In addition, while social movements have continued relentlessly for more than a year in the country to try to obtain better wages and working conditions, the ONS points out that 160,000 work days were lost due to strikes in June, particularly in the health sector. . . According to the think tank Resolution Foundation, a total of 3.9 million days of work were “lost” over the last year due to these social conflicts, “more than at any time since the 1980s”, denouncing the strikers in particularly their loss of real wages. .
Unemployment is the highest in almost two years
On Tuesday, the British Office for National Statistics (ONS) also announced an unemployment rate of 4.2% for the three months ending at the end of June compared to the previous three months. This rise in the unemployment rate to the highest in almost two years is because people are taking “a little longer to find work” than in previous months, says the ONS director of statistics, Darren Morgan.
It also notes that people unable to look for work due to prolonged illness hit “a new high.”
However, UK growth has proven resilient so far, at 0.2% in the second quarter, but there are signs that some companies are suffering. British low-cost housewares chain Wilko filed for bankruptcy because it could not find buyers or new financing. Some 12,500 jobs are threatened.
The British Ministry of Finance points out in a press release that the British unemployment rate continues to be lower than that of “Canada, France, Italy, Spain and the euro zone”. He adds that this is still “low compared to historical averages.”
Source: BFM TV
