The economy: Nice while it lasted

Posted: January 22, 2016 in economy
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UK Only Article: 
UK article only


Who’s afraid of cheap oil?

Fly Title: 

The economy


Recent strong growth in Britons’ pay packets proves short-lived

UNEMPLOYMENT in Britain is just 5.1%, the lowest since 2006. Economists expect that when joblessness falls, wages will rise as employers must compete more fiercely for staff. After a long slump brought on by the recession, by mid-2015 wages were growing nicely (see chart). But as unemployment has continued to decline, the economists have been left scratching their heads. In November three-monthly average growth in pay was just 1.9% year on year, far below levels in the years leading up to the 2008-09 global crisis.
The shaky world economy is partly to blame. The oil-price slump is biting: wages in the oil-and-gas industry, which are about 50% above the average, have fallen by 12% in the past year. Cheaper oil also prompted a flirtation with price deflation in the middle of 2015, making workers less inclined to demand pay rises. In the year to December 2015 the pound appreciated on a trade-weighted …

via Economic Crisis


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