UK Economic Summary
The following is a summary of the UK Economic data we collect and review on a regular basis. The devastation wrought by the COVID-19 pandemic and the subsequent lockdown of UK businesses has been significant despite the measures taken by the UK Government to provide support.
We can see that Inflation as measured by RPI and has fallen sharply on a Year on Year basis; that the rate of unemployment has risen significant and the drop in average hourly earnings looks very similar to the decline we saw in 2009. The increase in Claimant Count means that all the jobs added since the financial crisis plus more have been lost; unfortunately the tapering of the Furlough Scheme could see this figure rise even more through the rest of the year.
Looking at UK households, we can see the household savings ratios increasing as consumers to build up cash reserves nervous of the future. Subsequently, consumer confidence has fallen off a cliff. The level of consumer credit remains at record highs which is a significant risk given the increasing unemployment and declining average hourly earnings highlighted in the first chart. Fortunately, there has been no corresponding increase in serious Mortgage Arrears thus far.
The UKs respective Governments have the unenviable task of balancing the needs of the economy against the potential for further outbreaks of COVID-19 on a localised basis; whilst trying to maintain the compliance of a population looking for a return of some sort of normality.