The British economy remains resilient even with the growing economic uncertainties.
The unemployment rate held at 4.3 percent in the third quarter, according to the Office for National Statistics report released on Wednesday. However, employment declined by 14,000 in the quarter, the first since October 2016 and the largest decline since June 2015.
Likewise, the number of people neither working nor searching for a job climbed to more than seven months high. Meaning, the consistency recorded in the quarter was as a result of low participation rate and not a true reflection of the labour market.
According to the Bank of England, weak new business investments and high import costs continued to impact economic productivity and subdue earnings. Even though, wage growth rose by 2.2 percent in the quarter, this is still below the inflation rate of 3 percent and merely indicates intense price pressures.
Also, while policymakers expect the unemployment rate to improve to 4.2 percent, consumer spending is already under pressure at 3 percent, and with the Brexit headwinds expected to further weigh on the economy going forward. Job creation may nosedive if Brexit negotiation failed to materialize.
The Bank of England raised interest rates for the first time in over a decade this month, saying the rising costs is hurting consumer buying power and business profits.
Despite the weak pound sterling, exports remain below expectation as the surged in input costs and weak wage growth offset the supposed edge of the Brexit. Leading to stagnant growth and weak business confidence.
The pound remains fairly stable, trading between $1.3046 and $1.3212 against the US dollar.
