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Unemployment Falls To Five -Year Low, Pay Growth Matches Inflation

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http://uk.reuters.com/article/2014/04/16/uk-britain-jobs-idUKBREA3F0FO20140416

Britain's unemployment rate fell more sharply than expected in the three months to February and pay growth caught up with inflation for the first time nearly four years.

The unemployment rate fell to a five-year low of 6.9 percent in the three months to February, down from 7.2 percent in the three months to January and below a forecast in a Reuters poll of 7.1 percent.

It was also below the 7 percent level originally set by the Bank of England for considering an increase in interest rates. The Bank has since given fresh guidance about when it might start to tighten monetary conditions.

The Office for National Statistics said total pay growth picked up to 1.7 percent in the three months to February when consumer prices also rose 1.7 percent.

Did anyone say election?

The recovery goes from strength to strength.

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Good job Carney jettisoned the 7% target.

Why good? With the economy growing at nearly 3%, London house prices shooting up at nearly 20% p.a. and unemployment below 7% what possible explanation can there be for maintaining an 'emergency' base rate of 0.5%??

Unless, of course, Carney knows the UK economy is a ponzi charade that will collapse at the slightest disturbance...

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Why good? With the economy growing at nearly 3%, London house prices shooting up at nearly 20% p.a. and unemployment below 7% what possible explanation can there be for maintaining an 'emergency' base rate of 0.5%??

Unless, of course, Carney knows the UK economy is a ponzi charade that will collapse at the slightest disturbance...

City of London / Duke of Westminster making off like bandits.

Remember these people only see what's infront of their nose. Until the Bank of England relocates to Newcastle or somewhere and represents someone other than the oligarchy it will ever be thus.

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Until the Bank of England relocates to Newcastle or somewhere and represents someone other than the oligarchy it will ever be thus.

The Tories should have done this, maybe not BOE, but certainly some big gov departments.

It would have no negative impact for them, but would have been a massive gesture to Manchester or Liverpool or Newcastle.

It would have freed up some real estate in central London too.

I visited the BBC in Manchester and it's great to see - even if it did cost a lot of public money.

It would reduce the us/them feeling London gives right now. You could reinvent an entire city by moving one of the big departments to it - and putting HS2, HS3 etc. to get transport up to speed.

It must be getting near impossible to live on public salaries in London now.

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The Tories should have done this, maybe not BOE, but certainly some big gov departments.

It would have no negative impact for them, but would have been a massive gesture to Manchester or Liverpool or Newcastle.

It would have freed up some real estate in central London too.

I visited the BBC in Manchester and it's great to see - even if it did cost a lot of public money.

It would reduce the us/them feeling London gives right now. You could reinvent an entire city by moving one of the big departments to it - and putting HS2, HS3 etc. to get transport up to speed.

It must be getting near impossible to live on public salaries in London now.

But won't someone think of the senior civil servants that would be forced to either move or get another job. How heartless can you be! :ph34r:

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City of London / Duke of Westminster making off like bandits.

Remember these people only see what's infront of their nose. Until the Bank of England relocates to Newcastle or somewhere and represents someone other than the oligarchy it will ever be thus.

Not forgetting the politicians of all persuasions hanging onto the oligarchy's shirt tails and with skin in the game too...not least the Milibot with his three million pound London home and large mortgage. Any change of direction, forget it....the same mistakes as early noughties where interest rates are concerned.

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The inflation figure is a lie, ou all know that - why are you falling for the low inflation propaganda?

ARTIST TAXI DRIVER @chunkymark

Inflation 1.6% @ONS

Energy Bills 34%

Childcare 30%

Rail Fares 27%

Buses 22%

Water 20%

Rent 15%

Food 19%

London housing inflation 18% in 12 months.

What consumer prices is the 1.7% inflation actually measuring?

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The inflation figure is a lie, ou all know that - why are you falling for the low inflation propaganda?

London housing inflation 18% in 12 months.

What consumer prices is the 1.7% inflation actually measuring?

the methodology used to determine the inflation rate doesnt change much year on year, and the government doesnt choose the inflation basket. Please get a basic understanding of how the world works before you start believing in lunatic fringe conspiracy theories - when you have reached the stage where you assume that independent official figures are a lie that serve some shadowy elite, that should be grounds for suspecting you have made a wrong turn somewhere.

http://www.ons.gov.uk/ons/guide-method/user-guidance/prices/cpi-and-rpi/cpi-and-rpi-basket-of-goods-and-services/cpi-and-rpi-2013-basket-of-goods-and-services.pdf

For reference (looking at the things you quote)

a) Most people do not live in London, and most people living in London do not pay private rent. Rents elsewhere in the country are not up 15%.

B) Most families do not pay high child-care costs, they typically only apply during the very early years of each child's life, and even then only if they dont have relatives etc nearby

c) Most people do not use trains much, only London commuters

d) Energy bills are only a small part of consumption, and are given an appropriate weight in the basket

etc etc etc

Inflation is based on a 'typical' consumption basket, not targetted at your own consumption specifically.

Edited by Smyth

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What I think we need is 6% interest rates !!!!

Exactly, and that is NOT going to happen in a globalized economy and the reason that interest rates have been falling or the last 15 years.

Interesting times ahead for the next big crash. Interest rates cannot be lowered past 0%, otherwise they will be paying me to take a mortgage out :lol:

Unless the government print and spend there will be a real economic shock with many real cutbacks and loss of public services. Printing and spending in that way would seriously devalue the pound [again].

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Exactly, and that is NOT going to happen in a globalized economy and the reason that interest rates have been falling or the last 15 years.

Interesting times ahead for the next big continuation of this crash. Interest rates cannot be lowered past 0%, otherwise they will be paying me to take a mortgage out :lol:

Unless Even if the government print and spend there will be a real economic shock with many real cutbacks and loss of public services. Printing and spending in that way would seriously devalue the pound [again].

Correct for accuracy

Edited by TheCountOfNowhere

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I must admit I completely ignore the inflation figures now.

Completely pointless as it ignores the major overhead everyone has (housing).

'everyone'?

Only 18% of the country rents privately, and of them, a substantial amount have their rent paid by the government through housing benefits. For people who own their homes (which is still 65% of the population - ie the majority) housing costs have decreased over the last 4 years due to the low interest rates.

Also RPI includes housing costs, CPI doesnt.

Edited by Smyth

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a) Most people do not live in London, and most people living in London do not pay private rent. Rents elsewhere in the country are not up 15%.

B) Most families do not pay high child-care costs, they typically only apply during the very early years of each child's life, and even then only if they dont have relatives etc nearby

c) Most people do not use trains much, only London commuters

d) Energy bills are only a small part of consumption, and are given an appropriate weight in the basket

Inflation is based on a 'typical' consumption basket, not targetted at your own consumption specifically.

Typical nothing.....New items:

Canvas fashion shoe/trainer

Car wash, manual or automatic

DVD rental/video on demand subscription services

Fashion necklace

Flavoured milk

Fresh fruit snacking pot

Honey

Interchangeable lens digital camera

Men's clothing hire

Mixer drink

Plant food

Tufted carpet, minimum 80% wool

Tufted carpet,100% manmade fibres

Wild bird seed

Things people have to buy have risen in price, transport has not fallen, petrol has not fallen, heating/cooking fuel has not fallen, food has not fallen........save money stay indoors or go for a walk. ;)

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'everyone'?

Only 18% of the country rents privately, and of them, a substantial amount have their rent paid by the government through housing benefits. For people who own their homes (which is still 65% of the population - ie the majority) housing costs have decreased due to the low interest rates.

Also RPI includes housing costs, CPI doesnt.

Not quite as simple as that (although I take your point about the artificially low interest rates at the moment).

A third of those home owners are retired without mortgages, and over half are older with their mortgages being low to start with and largely paid off.

60% of WORKING people in the generation most affected by HPI rent and the stats get more alarming the further down the generations you get. That (or the alternative of a huge mortgage) are becoming the norm.

My point is that it's the single biggest inflationary problem facing almost half our working age population now. That's going to get worse each year, making the current inflation measurements more and more pointless. The things people HAVE to have are getting more expensive, not less. These inflation figures are frankly laughable when you look at what they actially measure.

Edited by byron78

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'everyone'?

Only 18% of the country rents privately, and of them, a substantial amount have their rent paid by the government through housing benefits. For people who own their homes (which is still 65% of the population - ie the majority) housing costs have decreased over the last 4 years due to the low interest rates.

Also RPI includes housing costs, CPI doesnt.

Also the reports that earnings growth has caught up with inflation has forgotten that RPI is still ahead of it.

However the media in their rush to report this are forgetting that there has been some movement of goal posts in this area as the picture is rather different if we look at Retail Price Inflation as I pointed out on twitter earlier.

So UK earnings now exceed CPI inflation by 0.1% annualised but remain some 0.8% below RPI#movethegoalposts

To which I got an interesting response which I suspect many will identify with! ‏

@hotairmail Funny how my costs are always linked to RPI and my income compared to CPI.

http://www.mindfulmoney.co.uk/wp/shaun-richards/with-the-strong-uk-employment-market-is-it-time-for-forward-guidance-mark-three/

So against RPI there is more progress needed.

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Typical nothing.....New items:

Canvas fashion shoe/trainer

Car wash, manual or automatic

DVD rental/video on demand subscription services

Fashion necklace

Flavoured milk

Fresh fruit snacking pot

Honey

Interchangeable lens digital camera

Men's clothing hire

Mixer drink

Plant food

Tufted carpet, minimum 80% wool

Tufted carpet,100% manmade fibres

Wild bird seed

Things people have to buy have risen in price, transport has not fallen, petrol has not fallen, heating/cooking fuel has not fallen, food has not fallen........save money stay indoors or go for a walk. ;)

The things in your list are all items that people buy. For what its worth, I think my household has bought 5 of them in the last month, 6 if you can count a McDonalds milkshake as flavoured milk. Obviously people spend a lot less on them that they do on (eg) food, which is why they have a lower weight in the basket.

The point of the inflation is to capture average patterns of consumption. Most people do not spend 100% of their salary on bills, food, and rent.

Edited by Smyth

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Also the reports that earnings growth has caught up with inflation has forgotten that RPI is still ahead of it.

So against RPI there is more progress needed.

Yeah this is true; people tend to select which measure of inflation (RPI vs CPI) they use based on the conclusions they want to draw.

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'everyone'?

Only 18% of the country rents privately, and of them, a substantial amount have their rent paid by the government through housing benefits. For people who own their homes (which is still 65% of the population - ie the majority) housing costs have decreased over the last 4 years due to the low interest rates.

Also RPI includes housing costs, CPI doesnt.

Probably does come down to individual baskets. Motoring has got to be my biggest outgoing and that must be something like -5% over the year, with petrol at 3 year lows. Council tax is another biggie and that has been virtually frozen for the last 5 years. These will have more than off set the rises in food and domestic energy for me.

I don't consider food that expensive these days anyway. It was a much bigger problem in the past, certainly the share of household income it used to take was probably double back in the 1970s. Not surprising, a can of pilchards was a quid back then, it is still a quid, we just reference the fact that is was briefly down to 37p a few years back.

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The things in your list are all items that people buy. Obviously people spend a lot less on them that they do on (eg) food, which is why they have a low weight in the basket.

The point of the inflation is to capture average patterns of consumption. Most people do not spend 100% of their salary on bills, food, and rent.

.....If the things people spend most of their money on every month are going up way above inflation, and pay rises and many other things they spend very little on like carpets and bird seed have fallen way below inflation....they are still worse off.

When people have little surplus money to spend after mortgage/rent/debt and things they have to buy....they do not have the money spare to buy any cheap extras. ;)

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.....If the things people spend most of their money on every month are going up way above inflation, and pay rises and many other things they spend very little on like carpets and bird seed have fallen way below inflation....they are still worse off.

Its a weighted average

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