Wednesday 24th April 2019
As the press continues to preface good news business articles with the refrain, “despite Brexit uncertainty” the economy once again defies the forecasts. Employment has hit a record high for the millennium. Growth, wages (inflation accounted for) and investment are all rising. Economic indicators for the first quarter of the year are resoundingly positive, a period in which dreaded uncertainty and panic over Britain’s future economic relationship with the EU reached an absolute maximum. It is time for Remainer doomsayers to fall in behind a vision for a more prosperous Britain outside the EU. The data demands it.
UK economic growth held up at 0.3% in the three months to February despite fears the chaos in the House of Commons over Theresa May’s deal would spill over to the commercial sector. Output for February dipped slightly from January’s 0.2%, which was a two year high.
While services are the main driver of growth, retail is not far behind. March posted a remarkable 1.1% increase in sales, making a mockery of miserly forecasts of just 0.3%. February showed a respectable rise of 0.6%, still half of March’s performance. “Consumers have undeniably been resilient and have seemingly so far largely brushed off Brexit concerns,” said EY economist Howard Archer in a nod to the spirit that encapsulates the British public. The elites are susceptible to panic, ordinary workers and consumers are not.
Our vision for a better Britain outside of the EU is already emerging. Nine out of ten new employees since the referendum are Britons with only 35,000 EU nationals joining the workforce since the EU referendum compared to 410,000 over the previous two years. That’s half of all new jobs taken up by Europeans now down to 5%. More than a million people are in work who weren’t before 2016, almost all of them Brits.
In other jobs news, the employment rate continues to break records. 32.7m people were in work in the three months to February, an additional 179,000 on the previous three months, almost half a million more since the same period in 2017-18. Again, we’re seeing the positive benefits of Brexit as fewer EU migrants come to the UK, improving the quality and security of jobs: most of the increase was accounted for by full-time employment. Meanwhile, the low unemployment rate is forcing businesses to raise pay. Wages have climbed 3.5% over the past 12 months, ahead of inflation at 1.9%. Astonishingly, almost a million vacancies are currently unfilled in the UK. Unemployment stands at 3.9%, the joint lowest since the mid-1970s.
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According to the Republic of Ireland’s Central Statistics Office, trade with the UK jumped a whopping 16% in February, amounting to €166m, €1.2bn in total. Exports to the UK accounted for 10% of Ireland’s total exports, while 26% of all imports come from Ireland’s closest neighbour, an indication of the importance of British trade and why an open border in Ireland is a certainty, with or without Theresa May’s dastardly deal.
Britain is going more global than ever with Heathrow airport expanding its passenger numbers by 2.3% to 6.5m people in March, month-on-month, the 29th consecutive increase. The number of flights to North America, Europe and Africa all rose – 4.9%, 2.9% and 5.8% respectively. The jump in passenger numbers flying to and from Europe was 0.7% higher than in February, showing that while Brexit is reducing immigration, tourism and business travel is increasing. Exactly what we want.
A survey by IHS Markit has found that around a fifth of marketing executives raised spending on marketing campaigns in the first quarter of the year, compared to only 12.8% who cut expenditure. The opposite had been forecast due to Theresa May’s scuppered deal. Yet another example of the economy reaching higher on the back of Brexit uncertainty reaching a pinnacle.
Britain has knocked the US of its perch in EY’s annual investment attractiveness survey after five years in the top spot. Lowly, pathetic Britain (Remainer parlance) accounted for a staggering 10% of all merger and acquisition activity worldwide, worth a combined total of £350bn. Top targets for investment were consumer products and retail, industry and financial services. Basically, everything publicly listed.
“While the UK’s position may surprise some, given current uncertainty, mergers and acquisitions activity during the period since the 2016 EU referendum has remained strong,” said EY.
Raghuram Rajan, one of the contenders to take over from Mark Carney at the Bank of England is one of the economists of global standing to occupy that space in the debate arguing for less global integration and policy-making nearer to the people to suit the circumstances, publishing a book, the third pillar: the revival of the community in a polarised world.
Rajan has already commented positively on Brexit, now arguing for Britain to go further in restoring sovereignty, not just back from Brussels, but London too.
“The question is, take back control from what? Taking back control from the EU to London will still
keep power in London.
“They don’t want power to remain in London, they want to take back control into their communities, the ability to affect these huge changes that are affecting them and that is eroding their sense of opportunity.”
However, Rajan is fearful of radically lower migration. “Controlled immigration has to be the answer for many countries, because we are still a long way from making robots supplant the population,” he says. Note that Singapore, which has traditionally been very open to immigration has begun to place restrictions as it anticipates a massive reduction in demand for labour brought about by automation. Rajan is not wrong to focus on the here and now, but we should be mindful of the future.
Here, the Expresses Leo McKinstry weaves together the many positive news economic indicators published over the past month, citing the employment and wage figures mentioned in this update while pointing out other useful nuggets. For instance, strikes are at their lowest since the Victorian age, the number of economically inactive people due to sickness or disability is falling – 7,000 in the last quarter – and house prices are gently climbing outside of London.
McKinstry takes the opportunity to expose the lie perpetrated by Jeremy Corbyn’s that Britain is akin to 1930s Germany.
“The tale of success not only defies all the gloomy forecasts but also makes a mockery of Labour’s relentless portrayal of Britain as a land of deepening misery, characterised by food banks and destitution.
“This bleak imagery, fed by Jeremy Corbyn’s ideological loathing for capitalism, bears little relation to reality.
“There are, of course, serious economic problems in our nation, like the underfunding of certain services, mounting homelessness and pockets of genuine poverty, but it is absurd to pretend that Britain is some kind of Dickensian basket case.”
Absurd spin. A lot of that going around.