Wednesday 13th March saw Chancellor Philip Hammond deliver his Spring Statement to Parliament. The UK economy continues to steadily grow, with unemployment at historic lows and with wages increasing; providing a solid foundation on which to build Britain’s economic future the Chancellor stated.
The statement forecast that employment within the UK is due to rise to 32.7 million over the next year and steadily increase over the next 5 years. The current unemployment rate of 4.0% is the lowest rate since 1975. The OBR have forecast it will remain around these historic lows over the next five years.
The statement also showed that wages are increasing at their fastest pace in over a decade, with 2018 presenting wage growth of 3.4%. It is forecast that wage increases are due to augment faster than inflation – set to remain close to 2%, leaving more money in peoples wallets.
The Budget has also announced updates to apprenticeship reforms. From the 1st April employers will see the co-investment rate they pay cut by half; taking the current 10% down to 5%. At the same time, levy-paying employers are able to share more levy funds across their supply chains; taking the maximum amount from 10% to 25%.
As the UK is set to leave the EU, Chancellor Hammond made it clear that the UK is open for business to both businesses’ and visitors. As part of this, research institutes / innovating businesses will benefit from an exemption for PhD level occupations from the cap on high-skilled visas, coming into effect this autumn.
This is salient information to the finance industry as it shows the continuous growth of the UK; not only with the rise of wages but the increase of employment.
In a recent Brexit development, the UK Parliament voted against May’s Brexit deal… again. MPs rejected May’s Brexit deal for a second time by a majority of 149. This is a slimmer defeat than the 230 majority inflicted on January 15th. It is widely known that many MPs are precarious around May’s skills to negotiate a good, if any Brexit deal.
A vote will now take place on the 14th March on a Brexit delay. If this is backed, May will then have to request an extension to Article 50 from the EU. As long as all member states agree, Brexit will be postponed. May has indicated this should be no longer than three months.