What's going on?
There was good news for Brits on Tuesday: UK wages grew by the most since 2008 in the three months to July, while unemployment fell.
What does this mean?
Despite ongoing Brexit uncertainty and concerns about the recent economic contraction – which could herald a future recession – UK wages held their own last quarter. Data out on Tuesday showed total pay grew by an annualized 4% in the three months to July – better than expected – and employment marched on at a record high (tweet this). Unemployment, meanwhile, dipped even further: it’s now at its lowest since 1974.
Crucially, wages rose a full 2% faster than inflation (i.e. the increase in the price of goods and services). Even so, the impact of high inflation from a few years back means the average Brit still earns less than they did in 2008.
Why should I care?
For markets: It’s not all strawberries and cream.
UK Parliament was suspended on Tuesday following the political opposition’s refusal to agree to a general election – and with Brexit due October 31st, time is ticking. While a law was passed this week compelling the government to request an extension if no one decides on a deal by then, there may be ways around it. All this uncertainty might be why the number of new UK jobs came in below expectations: companies in Brexit limbo aren’t hiring till they know more.
The bigger picture: Struggling to keep the lights on.
Britain suffered its biggest blackout in a decade last month, and on Tuesday, the National Grid asked the regulator to review its backup energy stores. Measures like these are more important than ever, given that Britain is becoming more dependent on wind power and progress of alternative energies remains slow. The UK is partnering with Chinese investors and French energy firm EDF to build new nuclear power stations, but EDF admitted on Tuesday to technical issues that may delay construction – and investors sent its shares down 7%.