The post-election economic bounce appears to be more than a fluke. Positive news came in waves this week, as data for employment figures, weekly wages and economic activity painted a good picture for newly-Brexited Britain.
People are in work and wages are finally back on track. Employment has hit a new record high (76.5 per cent) while unemployment has dropped to a new 44-year low, at 3.8 per cent. Most notably, weekly wages are (finally) back to their pre-financial crash levels ie, the highest since March 2008. And yes, it has taken a very long time get here – it has been the slowest wages recovery in economic history – but the pre-crisis target has been surpassed years before forecasters like the Institute for Fiscal Studies predicted.
Meanwhile economists over at Oxford Economics show how “flash” improvements for the private sector in January have actually been maintained throughout February. While services in the private took a small dip, they remained relatively high compared to 2019 and were off-set by a rise in manufacturing throughout the UK.
So the election bounce seems to have stuck – so far. The new immigration plans announced early this week take a serious economic gamble: can Britain keep growing if it stems the flow of low-waged EU workers? Ruling out an official route for low-skilled workers to come to the UK leaves big holes to fill in major sectors – including social care and hospitality – which could prove difficult with unemployment already so low – and a large chunk of those who the Home Secretary considers ‘economically inactive’ are students and others who aren’t in the position to take up daily work. It’s not just the mixed bag of policies that could rock the boat, but the short timeline for implementation – businesses have been given less than a year to prepare themselves for change.
Changes to the economic landscape will by no means be reflected in the quarters to come. A lot is about to change; but for now, as the figures stand, things are looking up in the UK. The doomsayers may prove correct. But not today.