A perfect storm of accelerating wage growth, declining inflation and a shortage of labour have increased earnings for workers to new all-time high for the decade.
In fact, wage growth was at 4% including bonuses while new figures have shown inflation unexpectedly falling to 1.6%, giving British households much needed breathing room ahead of an uncertain Brexit deadline in October.
With unemployment the lowest since 1974, falling to 3.8% and more than 300,000 jobs being created a year, there’s reason for optimism despite a slowing global economy.
In comparison to the eurozone, Britain’s inflation rate has stayed relatively close to the 2% figure, while the EU battles with falling inflation, a new programme of QE and structural problems that are forcing it to take even more drastic measures.
The European Central Bank this month announced a stricter policy of negative interest rates that is leading regional banks to take drastic measures to cut costs and slash staff.
While the UK banking sector has not faced the same kind of monetary policy, it will remain exposed to any European banking crisis in the future.
Following this week’s figures of strong wage growth and continued falls in unemployment, Britain is prepared to absorb the shock of a potential no-deal Brexit, although a deal is the preferable option and supported by a majority of businesses.