LONDON – Family incomes in Britain are compounded even if unemployment fell to its lowest level since the mid-1970s, official figures showed on Wednesday conflicting events that highlight the uncertainty that politicians agree on as The exit of the country of the European Union is approaching.
In its monthly update on the labor market, the National Bureau of Statistics said the unemployment rate between March and May fell to 4.5 percent, down 0.2 percentage points from the previous three months. The rate is now at its lowest level since 1975.
Overall, the agency said that the number of people without work fell by 64,000 in the quarter to just under 1.5 million. The employment rate, the proportion of people aged 16 to 64 who were employed, was 74.9%, the highest since comparable records began in 1971.
Positive news contrasts with other data showing that the economy is slowing. In the first quarter of the year, the British economy grew at a quarter-on-quarter rate of 0.2 percent, the lowest rate among all leading industrial economies in the Group of Seven
Employment figures are often late in the evolution of the economy, so the impact of the recent slowdown has not been felt for several months. The impact could be accentuated if the British Brexit talks, which began in earnest last month, failed to move forward in the coming months.
Concerns that Britain could exit the EU in March 2019, without a trade agreement with its former partners, that is, according to most economists, the greater risk the country faces a worse scenario that could lead to many Companies that leave the country to continental Europe instead.
In such a situation, Britain operate under the rules of the World Trade Organization, which would see tariffs blocked on many of the exports. Credit rating agency Moody warned on Wednesday that Britain’s growth prospects could be much lower if a free trade agreement privileged access to the single European market agreed.
Rival Standard & Poors issued an unusually somber assessment on Tuesday. “It is unclear whether the U.K. government can possibly give a reasonable good result,” said Kathrin Muehlbronner, senior vice president of Moody and author of the report.
“The likelihood of an abrupt and damaging exit without agreement and the reversal of WTO trade rules has increased compared to our expectations immediately after the popular consultation, the government pursues distant goals involving” difficult “exit.
Concern over the economic impact of Brexit is the main reason why the Bank of England cut its interest rate in August to a record low of 0.25%. However, some members of the Bank’s Monetary Policy Committee believe rates should rise as inflation is above the 2 percent target to 2.9 percent, and unemployment falls.
The concern for them is that the British economy works hard, which could raise prices. This is a concern that is also expressed by the Federal Reserve in the United States, which has always raised interest rates. On the other hand, the Bank of England’s exchange rate is likely to highlight the continued weakness of wage growth as a source of conconer.