Sunday, January 01, 2017

The year starts with Hell officially freezing over ...

Well, whoever would have thought it? 2017 starts with a cautiously optimistic article in the Guardian on Britain's economic prospects for the New Year.

There has continued to be much doom and gloom from some people but the UK economy has so far continued to do well, so much so that even the Guardian has noticed.

Katie Allen has written a piece in that paper called "Why the UK economy could fare better in 2017 than forecasters predict."

Here are some highlights from the article:

"The economy will keep growing

The UK economy remains unbalanced, with an over-reliance on consumer spending, but it chalked up respectable growth in 2016. Expansion will most likely slow in 2017, but the UK should avoid recession

Productivity is back in the spotlight

After years of the UK lagging other big economies on productivity, ministers have vowed to sort out economic efficiency and the chancellor, Philip Hammond, announced a £23bn productivity fund in his autumn statement.

Wages for the lowest paid will rise

Inflation will squeeze average take-home pay in 2017, but for the lowest paid there is some good news as the “national living wage” – the minimum wage for over-25s – will rise in April from £7.20 to £7.50 an hour. That is still below what anti-poverty campaigners say should be the real living wage needed to meet everyday costs. The voluntary living wage is £9.75 in London and £8.45 elsewhere as set by the Living Wage Foundation. It reckons a fifth of UK workers are still not paid enough. But the good news is 3,000 employers have joined the voluntary scheme, including almost a third of the FTSE 100.

More funding for apprenticeships

Another change for employers this year is the apprenticeship levy, a tax on businesses designed to fund more work-based training schemes. It is high time young people in the UK are given more routes into decent careers and expanding apprenticeships could help tackle skills shortages in sectors such as construction."

Katie Allen also thinks the problems of first-time home buyers may ease somewhat: she writes that

"There was no house price crash after the referendum, but growth eased, dampened by Brexit-related uncertainty and stamp duty changes. The market is expected to slow further in 2017 and some forecasters predict prices could fall. That outlook will bring homeowners out in cold sweats but for anyone who has been trying to get on the housing ladder, a moderation in prices is long overdue.
There is also a slither of hope that a government drive to address the UK’s housing shortage could help first-time buyers."

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