Newspaper article The Evening Standard (London, England)

The Good, the Bad and the Ugly of Britain's Economy

Newspaper article The Evening Standard (London, England)

The Good, the Bad and the Ugly of Britain's Economy

Article excerpt

Byline: economic analysis Russell Lynch

OSCAR Wilde once said that "to expect the unexpected shows a thoroughly modern intellect" although even the great man of letters would have surely have struggled with the advent of Brexit and Donald Trump.

In economic terms, at least, another unexpected event has been the relative resilience of the UK as a frankly outlandish year gives way to 2017. Developments this week give reason for relative cheer, despond and downright distaste: like Sergio Leone's best Western, starring Clint Eastwood (below), it's a case of the good, the bad and the ugly: The good: labour market Unemployment is still at 4.8% the lowest since 2005 in one of the biggest post-Brexit surprises so far, although the number of people in work dipping between August and October is a cause for concern. Whatever your misgivings about the uncertain age of the "gig economy", such low unemployment compared to Europe and the US has to be a bonus.

The question is whether the fall in this week's employment numbers is a blip or a trend that could develop into something more worrying. Here, at least, there are some more encouraging signs. Scotiabank economist Alan Clarke highlights recruiter Manpower's employment outlook survey of more than 2000 employers. It shows 7% more firms planning to hire than fire, and is a good guide to the development of the official figures.

Across the country, employers appear to be in their most optimistic mood for two years and in London, they're even more upbeat.

Elsewhere, the Recruitment & Employment Confederation's November survey found the number of people placed in permanent jobs had risen at the fastest rate since February.

Hopefully, the jobs market can withstand a tricky 2017.

The bad: inflation squeeze When petrol, food and clothing costs are going up faster than wages, it's a big, blinking warning light. We're not there yet but figures this week show the rapidly approaching end of the two-year sweet spot for consumers, when oil price falls have fallen pretty much straight into consumer wallets, Brexit or no Brexit. …

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