Figures released yesterday showed that British wages grew by 3.4% in December. This is slightly below the 3.5% growth the markets had been expecting, but is still above the rate of inflation. Including bonuses, the increase in earnings remains the fastest since the three months to July 2008 and will be much-welcomed news to those households struggling as a result of a decade of austerity.
We also saw the unemployment rate hold steady at 4% in December which was in line with expectations, while labour productivity rose by 0.2% in the fourth quarter of 2018. This followed a fall of 0.4% in the previous quarter. The number of people claiming for unemployment benefits in the UK increased by 14,200 in January 2019 which was slightly higher than the 12,300 the markets had expected.
Honda confirmed that its Swindon plant will close in 2021, with the loss of around 7,000 jobs. While the Japanese carmaker has been at pains to claim that Brexit has nothing to do with the decision, automotive experts have cast doubt on these assertions. Professor David Bailey of Aston University highlighted a landmark free trade deal between the EU and Japan that will allow Honda to export cars to Europe without any tariffs.
Irrespective of the reasons behind the decision, there can be little doubt that fears of a no-deal Brexit are affecting the industry; investment by manufacturers almost halved in 2018, with carmakers, including Jaguar Land Rover, Nissan, Ford and BMW all having Brexit-related preparations in place. We need some certainty surrounding Brexit and fast – there are just 37 days until the UK is set to leave the EU.
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