With the end of Q2 fast approaching, we thought we’d take a look at the key statistics telling us how the UK economy is doing, to find out the current health of the nation.
Inflation Falls to 1.5%
May 2014 reported a drop in inflation to 1.5%, its lowest level in 4.5 years, helped by a fall in air fare and food prices. The Consumer Prices Index fell to 1.5% in May compared with 1.8% in April, according to the Office for National Statistics, which is the sixth consecutive month that inflation has been below the Bank of England’s 2% target. Prices, however, are still increasing faster than average earnings, which rose 0.7% in the 3 months to April.
House Prices rise by almost 10%
House price increases accelerated in April, rising by 9.9% compared with the same month a year ago, according to official figures. The typical price of £260,000 grew at the fastest rate for nearly four years. The Office for National Statistics said prices rose strongly across the UK, with Wales, Scotland and Northern Ireland all picking up pace, although London where prices were up 18.7%, remains the driving force behind the housing revival. Mark Carney, the Governor of the Bank of England said he would take prompt action, if action was needed to reduce stimulus in the housing market and avoid another property bubble.
Stable Credit Outlook
Credit agency Standard & Poor’s upgraded the UK’s credit outlook to “stable” from “negative” and kept its AAA assessment of borrowing strength. The agency forecast that the UK economy would grow by almost 3% in 2014. The agency also forecast that the UK economy would expand by 2.5% in 2015, led by business investment and private consumption.
Unemployment falls to under 2.2 m
The jobs market continued to improve in the 3 months to April, with the number of those out of work falling by 161,000 to 2.16 million, bringing the unemployment rate down to 6.6%. The number of people in work rose by a record 345,000, to 30.5 million, but the quarterly rate of earnings growth slowed to 0.7% from 1.9% the previous month. The total number of people out of work is now at its lowest level for more than five years, with youth unemployment, which covers 16-24 year olds, standing at 853,000.
What Does It Mean?
The outlook for the economy over the next 3 months is “exceptionally strong” according to the employers’ organisation the CBI. Its latest monthly survey indicated that growth expectations were the strongest since the CBI started collecting data in 2003. The CBI’s chief policy director Katja Hall said: “These latest growth figures, and the strong expectations for the next quarter, provide further encouraging signs of increasing vigour and confidence across the UK economy.
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photo 1 – backdoor survival; photo 2 – 401(K) 2012