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

Unemployment continues to fall

Labour Market Statistics, April 2015: ONS

Main points for the 3 months ending February 2015

  • Comparing the estimates for the 3 months ending February 2015 with those for September to November 2014, employment continued to rise and unemployment continued to fall.
  • There were 1.84 million unemployed people, 76,000 fewer than for September to November 2014 and 416,000 fewer than for a year earlier.
  • The proportion of the economically active population who were unemployed (the unemployment rate) was 5.6%, lower than for September to November 2014 (5.8%) and for a year earlier (6.9%).
  • There were 8.99 million people aged from 16 to 64 who were out of work and not seeking or available to work (known as economically inactive), 104,000 fewer than for September to November 2014 but 11,000 more than for a year earlier.
  • There were 31.05 million people in work, 248,000 more than for September to November 2014 and 557,000 more than for a year earlier.
  • The proportion of people aged from 16 to 64 in work (the employment rate) was 73.4%, the highest since comparable records began in 1971.
  • The proportion of people aged from 16 to 64 who were economically inactive (the inactivity rate) was 22.1%, lower than for September to November 2014 (22.4%) but unchanged compared with a year earlier.
  • Comparing the 3 months ending February 2015 with a year earlier, pay for employees in Great Britain increased by 1.7% including bonuses and by 1.8% excluding bonuses.

It’s the rich what gets the pleasure

Conservative tax cuts worth ten times more to high earners than basic earners: TUC

  • A TUC-commissioned analysis  of tax policies in the Conservative Party manifesto shows that the party has chosen to prioritise unfunded tax giveaways to the wealthy over support for the low-paid and middle earners.
  • It shows that the big winners from unfunded tax cut proposals would be higher earners, with the lowest paid getting much smaller gains.
  • The analysis looked at the average impacts for each decile across the household income spectrum. It found that the poorest decile would get nothing on average, and the second poorest only £2 a year. However, the average gain for the richest decile would be £875 a year.
  • While the maximum benefit a basic-rate taxpayer can expect from the proposed personal allowance increase is just £222 per year, the maximum benefit for a higher rate taxpayer would be £1,126.
  • A taxpayer earning between £50,000 and £100,000 (the level of income at which the personal allowance starts being tapered away) would also benefit from proposals to raise the higher-rate tax threshold, meaning that their after-tax income could rise by over £2,000 per year – around ten times more than the tax gains for a basic earner.

Slow but steady retail sales growth

Retail Sales Monitor, March 2015: BRC-KPMG

  • UK retail sales increased by 3.2% on a like-for-like basis from March 2014, when they had decreased 1.7% on the preceding year.
  • On a total basis, sales were up 4.7%, against a 0.3% fall in March 2014. Adjusted for the BRC-Nielsen Shop Price Index deflation, total growth was 6.8%. The figures are flattered by the inclusion of Easter in March this year against April last year.
  • Total Food sales experienced their strongest growth since July 2013, helped by the Easter distortion. Growth was also strong in the home categories but subdued in the fashion ones.
  • Online sales of non-food products in the UK grew 12.3% in March versus a year earlier, when it had grown 12.8%. The Non-Food online penetration rate was 17.6%, up from 16.9% in March 2014