In response to today’s UK labour market figures, Andrew Sentance, senior economic adviser at PwC, commented:
“Although the unemployment rate remains at its lowest level since the 1970s, this latest set of labour market data is consistent with a marked economic slowdown in recent months.
“Employment has risen by just 30,000 - less than 0.1% - over the past six months. This compares with a rise of nearly 300,000 over the previous six month period in the first half of 2016.
“Annual wage growth appears to have stabilised at 2.3%, in line with the rate of price inflation and this means that real workers’ wages are no longer rising. With inflation expected to pick up further over the course of this year, this squeeze on consumer purchasing power is likely to intensify.
“Both the employment and wage figures therefore point to a slowdown in consumer spending, which is already apparent from the retail sales data for the early months of this year.
“On this evidence, the resilient growth we saw in the second half of 2016 is unlikely to be sustained. We should expect slower growth in 2017 and 2018 as consumers rein in spending and the uncertainty around Brexit holds back investment.”
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