The speed in which the UKís economy has recovered slowed to its lowest point since March last year, company lobby group CBI has identified, though the prognosis on the future of worker wages and the average standard of living appears positive following a number of positive announcements from some of Britainís leading business and research groups.
CBIís most recent study on the performance of the private sector found that growth had slowed down in all its areas, with service and Retail Companyís being the worst affected. Whilst total output was up 19%, this was significantly lower than the equivocal value in February, which was shown to be 32%.
Nevertheless, confidence within the sector has remained high, with growth forecasts estimating that it will begin to speed up in the upcoming quarter, and the CBI identifying that improving confidence levels should have the knock on effect of higher business investment levels in the country, more employment prospects and higher wages for UK workers.
And a recent study conducted by the Centre for Economics and Business Research in tandem with YouGov, indicated that consumer confidence had risen to its highest point since the start of the recession,
Anna Leach, the CBI’s head of economic analysis, said: “As this year progresses, we expect further increases in business and consumer confidence. Productivity and earnings should also start to recover.”
Robert Chote, the chairman for the Office for Budget Responsibility, attributed the recent upturn in the countryís economic prospects to renewed confidence within the business world in the UK, and the improving state of the global economy as a whole.
However, Mr Chote did highlight that the pace in which the countryís economy grows will likely begin to slow down later on in the year, as consumer spending falls on year by year comparison and less people utilise their saving funds in order to subsidise their overall expenditure.
Wage rise expected
The Federation of Small Businesses has identified that confidence within businesses in its dominion has been on the rise, and this has resulted in many of them either instigating, or provisionally agreeing a rise in their employeesí wages.
“After several years of wage restraint, it is encouraging that the vast majority of small firms are beginning to raise wages again,” the FSB disclosed in its most recent survey.
The industryís which are expected to have the most benefits for their employees this year are the engineering, business, financial and manufacturing ones, with wages expected to rise sharply within these sectors this year.
Gap closing between wages and cost of living
The news that renewed business investment levels will likely incur a multitude of wage rises across a number of different industries will be welcome news to workers in the UK, who have been faced with a constant rise in their cost of living at a time when wages have failed to keep up.
The consistency in which this occurrence has happened has provoked a number of opposition politicians to identify that the country is in a ëcost of living crisisí, in which worker wages are constantly squeezed to the brink by rising expenditure demands during a time when the actual value of their wages are constantly decreasing.
However, this week it was announced that the average rise in wages in recent times had actually caught up with inflation, so that the average quarterly wage rise between January and November, and inflation in February as measured by the consumer price index, both stood at 1.7%.
People who work within the manufacturing industry have experienced the sharpest rise in their wages in the past three months, with the EEF estimating that they had risen by 2.6%. Chief economist Lee Hopley argued that this will likely begin to plateau in the upcoming 6 months.
She added: “This is another good indication that the green shoots of recovery are firmly taking root and the pressure on household budgets, at least for manufacturing employees, is starting to unwind. Workers in the sector are reaping the rewards of recovery earlier than others.”
The new data on inflation has renewed the political debate between Labour and the Conservatives about the standard of living and cost of living that workers are experiencing at present, with Labour arguing that the latter continues to bring down the former, whilst the Conservatives have argued that the data clearly indicates the success in its policies to try and address the problem.