ONS release shows record UK employment
The Office for National Statistics (ONS) has released a range of data this week in Britain. Let's take a quick run through some of the more interesting stuff.
Firstly, the rate of UK employment growth slowed to 46,000 in the June-August quarter, but the total increase in employment over the past year remains extraordinarily high at 736,000 (click charts to expand):
Sceptics point out the increase in zero hour contracts as having distorted the data. although the glass half full types would point to the fact that recent jobs gains have been largely of the full time variety.
Unemployment dives to 6pc
The best part of this ONS employment market release was the massive drop in unemployment with 538,000 fewer unemployed persons than the prior year, and the total recorded as unemployed falling to 1.97 million.
That is the largest fall in annual unemployment across the entire data set since records began in 1972. The jobless rate fell to 6 percent, which is the lowest headline rate of British unemployment since 2008.
That's the good news.
Real earnings decline further
The less good news is that real wages growth has been the weakest on record in recent years and earnings growth remains very sluggish.
Pay growth increased by 0.7 percent in the year to August 2014, and even with inflation now declining this represents an ongoing decline in real terms.
With such weak wages growth in evidence, the rate of inflation has dived from above to 5 percent to only 1.2 percent as denoted by the chart below.
There is just no way that interest rates will be hiked any time in 2014 with a chart such as the one below in evidence (the UK inflation target is 2 percent) and the Bank of England confirmed as much in a speech today.
With US stock markets taking a battering this week, the FTSE took a bath in sympathy, getting crunched by 2.8 percent yesterday.
Meanwhile the ONS mix-adjusted house price index rose to 207.7 in August, its highest level on record and more than 12 percent higher than its pre-financial crisis peak.
Large volumes of first time buyers have poured back into the market over the past year.
In truth the below house price index chart has been driven almost exclusively by London since that time with prices in the capital rising by 19.6 percent over the past year to be a whopping 39.5 percent higher than their pre-financial crisis peak.
Regional price growth away from London and its commuter counties has been non-existent in Britain since 2009, although a number of regions have rebounded in the past year (see below) to at long last recover their financial crisis losses.
As the London market gets set to take a breather, a ripple effect will now follow across the south-east of England. Over the past year the strongest gains by region were as below, with the south east now taking up the capital growth mantle as the London market hits a plateau in the months ahead.