MOOTICITY

The latest ONS release saw UK unemployment reach 3.7%, the lowest since 1973 and a new a record low for the number of people unemployed between 6 and 12 months. As the ONS points out, this downward trend is one that we have been seeing since 2013 and has continued it's trajectory as Covid restrictions are lifted. The majority of the increase in payrolled employees in the year to April 2022 has been in the accommodation and food services industry which is also the sector that was most hard-hit by Covid restrictions. In the graph above we can see that peak employment numbers were reached at the dawn of the Covid outbreak in Q1 2020 with a drop in employment figures that has been steadily improving from its trough in Q1 2021. A year on from there we can see the beginning of a flatline of cumulative growth in the last three quarters. This is largely due to the missing circa 450,000 workers that have left the labour market so are neither reflected in the employment or unemployment figur...

 Macroprudential Policy: Have we run into a wall? Often when it comes to headline economics news it is speeches and views of members of the Monetary Policy Committee (MPC) at the Bank of England (Bank) that take centre stage. The cabinet of nine members in the UK has a government-ordered remit to vote for the best interest rate and Quantitative Easing (QE) strategy in order to maintain the inflation rate at 2%. When the economy saw itself in the process of Brexit with rates at 0.75% and QE at £445bn, there was already talk of the MPC running out of ammunition to combat another economic downturn which was proven to be wrong following the pandemic when the slash of interest rates to 0.1% and increasing the QE programme to the peak of £895bn, not to mentions the additional Term Funding Scheme for Small to Medium Enterprises (TFSME) certainly played a big role in allowing the economy to respond to a significant, sharp and negative economic shock.  However, I would like to revisit ...

UK GDP Data Release Commentary - 12 May 22 The scores are on the doors for Gross Domestic Product (GDP) growth in March this year, dropping by 0.1% from February; it is slightly lower than the zero growth average consensus. However, this does mean that growth for Q1 2022 is at a positive of 0.8% it does mark a slowdown in the economy from the Q4 2021 when growth stood at 1.3%.  So what is behind the economic slowdown as measured by GDP? In the latest Office of National Statistics (ONS) release we can read that the UK economy is still experiencing a turning point, comparable in a sense to that experienced in the Great Financial Crisis (GFC) of 2008. The monthly estimates for economic growth are subject to a slightly higher degree of uncertainty than they would otherwise be in more stable conditions. The Gross Value Added (GVA) method used by the ONS for estimating monthly GDP is based on the economic principle that in equilibrium ‘income = expenditure’. The ONS uses sales as a prox...