The UK economy has finally recovered. Today’s estimate by the Office for National Statistics of gross domestic product for the second quarter takes output (adjusted for inflation) to a new high, above the level of the first quarter of 2008*.
Hurrah. But, although welcome, this is nothing to celebrate. The government will not be ordering church bells to be rung. That the sum total of everything produced in the economy is only now returning to the levels of six years ago is astonishing. To give some context, the recession and recovery have lasted about nine months longer than the second world war. Read more
Does knowing more about finance lead to making better investment decisions?
It might if you believe a working paper from the US National Bureau of Economic Research, published yesterday. By matching records from an unnamed company’s pension scheme and responses to a survey asking some basic questions about finance, they “find that risk-adjusted annual expected returns are 130 basis points higher for the most financially knowledgeable employees.” The questions used in the survey can be found in the quiz below. Read more
The Office for National Statistics has, for the first time, included estimates of the impact of prostitution and illegal drugs in the national accounts. By the ONS’ reckoning they add about £10bn to the British economy.
Estimates of anything to do with the black economy are always going to be uncertain at best, but the statistics available are pretty interesting. Read more
Before a measure of inequality can be calculated there are some questions that need to be answered: Chiefly, equality of what? Living standards? Wealth? Income? Or, perhaps, opportunity?
And what do you include? Is income measured before tax and benefits, or after? Do you include public goods in measures of living standards? How do you account for public assets and debts in wealth?
And who are the relevant people? The whole world or one country? Do you include students and children or just adults of working age?
The level of inequality measured will always depend on how these questions are answered.
The British Wealth and Assets survey, released today, provides measures of inequality in private wealth (so not including public debts and assets) between different households.
And households come in different shapes and sizes.
Individuals who are married or widowed are the most likely to live in a wealthier household. Whereas those who are separated, divorced or single are the least likely.
Wage growth has risen by more than inflation for the first time since 2010 and employment has grown by the largest amount for 24 years, according to figures released by the ONS today.
Given this context its worth taking a look at the performance of Britain’s labour market since the 2008 financial crisis.
1. Despite lacklustre GDP growth employment has been steadily increasing since 2010. Read more