Britain’s economy is going through a renaissance — we are living through one of the best times ever.
We have the highest employment rate in four decades, we’re earning more money than before, and we’re buying homes at an earlier age. We’ve completely and utterly stuck two fingers up at the recession in just seven years.
At the beginning of this month, both the Office for National Statistics (ONS)and the Bureau of Economic Analysis (BEA), the respective UK and US statistical agencies, made GDP revisions. The US has been revised down and the UK has been revised up. The comparative results are astounding — Britain’s economic recovery just caught up with the US.
The latest data from the ONS shows that the UK economy was 2.6% larger in the second quarter (April to June) in 2015, compared to the same quarter a year ago. Quarter-on-quarter growth was still at 0.4%.
This is huge.
It’s easy to forget what a massive feat this has been for Britain because of today’s success. But just look how horrific it was for Britain back in 2008 when the credit crisis unfurled.
And we’ve conquered this in under eight years.
Jobs for everyone
Only a few months after the start of Britain’s recession in 2008, the country had around 1.6 million people out of work. By the time Conservative party-led coalition came to power in 2010, the jobless rate was at a 8%. A year later unemployment peaked at its highest level in 17 years at around 2.7 million.
Now look at it — it hit a record high.
The unemployment rate is now at a low of 5.6%, as of the April to June data. A year ago that was at 6.3%. And it’s not just people grabbing part time shifts wherever they can.
Out of the 31.03 million people in work, 22.76 million people are working full-time, 352,000 more than for a year earlier. Both men and women alike are finding more work.
ONS figures show that men working full-time increased by 153,000 to reach 14.36 million and women working full-time increased by 198,000 to reach 8.40 million.
We’re making more money
Between 2012 and 2013, wages stagnated. It wasn’t long before that unemployment hit a 17 year high (2011) and pretty much everyone was just focusing on getting and retaining a job. However, salaries have started to pick up, and with inflation so low, real wages are now genuinely accelerating.
Comparing April to June 2015 with a year earlier, wages for employees in Britain increased by 2.4% including bonuses and by 2.8% excluding bonuses. That’s over a period in which there was zero consumer price inflation — so wages are rising while the prices of ordinary goods people buy aren’t.
Looking at longer term movements since comparable records began in 2000, average total pay for employees in Great Britain in nominal terms (that is, not adjusted for consumer price inflation) increased from £311 a week in January 2000 to £488 a week in June 2015; an increase of 56.6%.
Average total pay is now around £488 a week as of June 2015.
More people are able to own their own home
Britain is still under pressure to build more homes and prices in London are going insane. We are in an era of super-high housing prices.
According to the latest house price data from the ONS, released in July this year, the average price for a property in Britain is £274,000 ($US427,633) while in London is stands at a huge £503,000 ($US785,089). Excluding London, the average house price is £210,000 ($US327,802).
While high property prices are changing the dynamics of the housing market in the UK, more and more people are actually getting on the housing ladder.
More people being in work and earning more means greater prospects on the housing ladder. On top of that, the landscape is pretty fertile for people to get on the property ladder and to stop funnelling money into the rental market.
The government launched the Help to Buy scheme in October 2013. This meant that first time buyers would be able to snag a home with only a 5% deposit. The government would provide the remaining 15%.
This has meant the average age for a first time buyer has fallen to the average age of 31 — a whole six years off the previous number.
So, sure, there are lots of other elements to the economy that need to be finessed and stimulated. Our industrial production could improve, our dependence on imports to be weakened but one thing is for certain, it isn’t all that bad. We are have jobs, we have more money than before, and we’re able to make sure we have invested in the future with the purchase of a roof over our heads.
That sounds pretty good to me.