Economic well-being

Economic Well-being, Quarter 1 Jan to Mar 2015

  • In Q1 2015, gross domestic product (GDP) per head increased 0.2% compared to Q4 2014 but remains 0.6% below pre-economic downturn levels. This was a slightly slower growth rate than the 0.4% quarterly increase seen in GDP.
  • Net national disposable income (NNDI) per head, which represents the income available to UK residents, increased 1.6% compared to Q4 2014, but remains 3.8% below pre-economic downturn levels.
  • In Q1 2015, real household disposable income (RHDI) per head (excluding non-profit institutions serving households) was unchanged (0.0%) compared to Q4 2014 and increased 3.7% compared to the same quarter a year ago (Q1 2014). Overall, it remains broadly in line with the level of household income seen since 2012.
  • In the financial year ending 2014, median income (the income of the middle household if all households are ranked from the lowest income to the highest) was £24,500 – 3.4% higher than in 2012/13. This is a reversal of the downward trend seen since the finanical year ending 2008.
  • In Q1 2015, household spending per head grew 0.8% compared to the previous quarter – continuing the general upward trend that started in Q3 2011.

Faster growth

Quarterly National Accounts, Quarter 1 (Jan to Mar) 2015

  • UK GDP in volume terms was estimated to have increased by 0.4% between Quarter 4 (Oct to Dec) 2014 and Quarter 1 (Jan to Mar) 2015, revised up 0.1 percentage points from the previous estimate of GDP published 28 May 2015.
  • GDP was estimated to have increased by 3.0% in 2014, compared with 2013, revised up 0.2 percentage points from the previously published estimate.
  • Between Quarter 1 2014 and Quarter 1 2015, GDP in volume terms increased by 2.9%, revised up 0.5 percentage points from the previously published estimate.
  • GDP in current prices was estimated to have increased by 0.7% between Quarter 4 2014 and Quarter 1 2015, revised down 0.2 percentage points from the previously published estimate.
  • GDP per head was estimated to have increased by 0.2% between Quarter 4 2014 and Quarter 1 2015, revised up 0.1 percentage points from the previously published estimate. Between 2013 and 2014, GDP per head increased by 2.3%.

Unemployment continues to fall

Labour Market Statistics, June 2015: ONS

Comparing the estimates for February to April 2015 with those for the 3 months to January 2015, employment continued to rise and unemployment continued to fall.

  • There were 1.81 million unemployed people. This was 43,000 fewer than for the 3 months to January 2015 and 349,000 fewer than for a year earlier.
  • The proportion of the economically active population who were unemployed (the unemployment rate) was 5.5%, lower than for the 3 months to January 2015 (5.7%) and for a year earlier (6.6%). Economically active people are those in work plus those seeking and available to work.
  • There were 9.02 million people aged from 16 to 64 who were out of work and not seeking or available to work (known as economically inactive), 10,000 fewer than for the 3 months to January 2015 but 60,000 more than for a year earlier.
  • The proportion of people aged from 16 to 64 who were economically inactive (the inactivity rate) was 22.2%, little changed compared with the 3 months to January 2015 and with a year earlier
  • There were 31.05 million people in work, 114,000 more than for the 3 months to January 2015 and 424,000 more than for a year earlier.
  • There were 22.74 million people working full-time, 362,000 more than for a year earlier. There were 8.31 million people working part-time, 63,000 more than for a year earlier.
  • The proportion of people aged from 16 to 64 in work (the employment rate) was 73.4%, up slightly from the 3 months to January 2015 (73.3%) and higher than for a year earlier (72.7%).

Negative inflation

Consumer Price Inflation, April 2015: ONS

  • The Consumer Prices Index (CPI) fell by 0.1% in the year to April 2015, compared to no change (0.0%) in the year to March 2015.
  • This is the first time the CPI has fallen over the year since official records began in 1996 and the first time since 1960 based on comparable historic estimates.
  • The largest downward contribution came from transport services – notably air and sea fares, with the timing of Easter this year a likely factor.
  • The Retail Prices Index (not a National Statistic) grew by 0.9% in the year ending April 2015, unchanged from March 2015.

Unemployment continues to fall

UK Labour Market, May 2015: ONS

Main points for January to March 2015

  • There were 1.83 million unemployed people. This was 35,000 fewer than for October to December 2014, the smallest quarterly fall since June to August 2013. Comparing January to March 2015 with a year earlier, there were 386,000 fewer unemployed people.
  • The proportion of the economically active population who were unemployed (the unemployment rate) was 5.5%, lower than for October to December 2014 (5.7%) and for a year earlier (6.8%). The economically active population is those in work plus those seeking and available to work.
  • There were 8.98 million people aged from 16 to 64 who were out of work and not seeking or available to work (known as economically inactive), 69,000 fewer than for October to December 2014 but little changed compared with a year earlier.
  • The proportion of people aged from 16 to 64 who were economically inactive (the inactivity rate) was 22.1%, lower than for October to December 2014 (22.3%) but unchanged compared with a year earlier.
  • Comparing the estimates for January to March 2015 with those for October to December 2014, employment continued to rise and unemployment continued to fall. These changes maintain the general direction of movement since late 2011 to early 2012.
  • There were 31.10 million people in work, 202,000 more than for October to December 2014 and 564,000 more than for a year earlier.
  • The proportion of people aged from 16 to 64 in work (the employment rate) was 73.5%, the highest since comparable records began in 1971.

UK economic growth slows

Gross Domestic Product Preliminary Estimate, Quarter 1 (Jan to Mar) 2015: ONS

  • GDP is estimated to have increased by 0.3% in Quarter 1 (Jan to Mar) 2015 compared with growth of 0.6% in Quarter 4 (Oct to Dec) 2014.
  • Output increased in services by 0.5% in Quarter 1 (Jan to Mar) 2015. The other 3 main industrial groupings within the economy decreased, with construction falling by 1.6%, production by 0.1% and agriculture by 0.2%.
  • GDP was 2.4% higher in Quarter 1 (Jan to Mar) 2015 compared with the same quarter a year ago.
  • In Quarter 1 (Jan to Mar) 2015, GDP was estimated to have been 4.0% higher than the pre-economic downturn peak of Quarter 1 (Jan to Mar) 2008. From the peak in Quarter 1 (Jan to Mar) 2008 to the trough in Quarter 2 (Apr to June) 2009, the economy shrank by 6.0%.

Underemployment in the UK and Europe

Almost 10 million part-time workers in the EU would have preferred to work more: Eurostat Labour Force Survey 2014

  • Over 1.8 million UK part-time workers were underemployed in 2014. Underemployed part-time workers are persons aged 15-74 working part-time who wish to work additional hours and are available to do so. Part-time work is recorded as self-reported by individuals
  • 64% of those underemployed UK workers were women
  • Among the 44.1 million persons in the European Union (EU) working part-time in 2014, 9.8 million were underemployed