According to recent statistics on wage increase, The UK economy grew by 0.7% since 2017. The wage increase has been recorded at its fastest rate in almost 10 years. The latest official data also showed unemployment fell by 47,000 to 1.36 million in the three months to August. The jobless rate remained at 4%.
The head of labour market, from the Office for National Statistic’s (ONS) David Freeman said that regular monthly wage increased significantly allowing for inflation. The unemployment rate was lowest since the 1970s.
The UK banks are forecasting wage growth of 1.3% and 1.7% for the coming years. However, this is in the case of UK for a smooth BREXIT transition. If the transition is not smooth and more of an disrupt or disorganised one, this could result with dysfunctional supply chain management, production and furthermore impaired UK capacity to deal with current business sectors as Quarterly Inflation Report suggests.
The UK banks are indicated to keep the inflation rate at 2% in order to maintain the strength of the economy. This suggests wage growth and adjustment in interest rates. The interest rates were raised in August, 2018; however the latest decision to keep the rates on hold will disappoint the savers and that if BREXIT transition does not take smooth process the rates could triple up in 2019.
