Industry Snapshot
Posted on 06 November 2013
Growth
At the time of writing, the UK economy seems to have lurched into life. UK Gross Domestic Product (GDP) in volume terms was estimated to have increased by 0.8% between Q2 2013 and Q3 2013. This marks a second strong quarter of growth, following growth of 0.7% in Q2 2013. Additionally, when we look at year-on-year comparison, GDP has increased by 1.5% comparing Q3 2013 and Q3 2012.
Most encouragingly, this rise in GDP was driven by growth across all sectors of the economy, again for the second quarter in a row. This suggests that a sustained economic recovery may now be underway, with GDP estimated to be only 2.5% below the previous peak in Q1 2008.
Inflation
Latest figures from the ONS, published in October 2013, show that the Consumer Prices Index (CPI) grew by 2.8% in September this year, flat from August. CPI has been relatively stable in 2013, being between 2.7% and 2.9% for 8 out of 9 months of the year. The largest upward contributions came from air fares but this was balanced out by downward contributions from petrol and diesel prices.
CPIH, the measure of consumer price inflation including owner occupiers housing costs, grew by 2.5% in September, again unchanged from August.
Pay settlements
Latest analysis of IDSpay.co.uk shows that in the three months to the end of October, the median basic pay award across the whole economy was 2.0% with the interquartile range of awards sitting at 1.4% to 2.7%. This has narrowed compared to the three months to the end of July, where the range of awards was 2.0% to 2.9%.
Looking at just the private sector, the median pay settlement is slightly higher than for the whole economy, standing at 2.2% and the interquartile range at 2.0% to 2.7%. However, with the inflation at 2.8% in October, this means many people are still experiencing below inflation pay increases.
Labour market
Official figures show that the rate of unemployment was down to 7.7% of the economically active population in June to August this year, down 0.1% from March to May. The employment rate was 71.7% in the same period, up 0.3% on March to May. Overall, there were 2.49 million unemployed people from May to July, down 24,000 from February to April.
Total pay between June and August rose by 0.7% and regular pay by 0.8%. In cash terms, this rise means that average weekly earnings excluding bonus is currently £447.
