EQ weekly roundup 18-4-18

This week’s roundup includes news that Wages overtake inflation to end squeeze, up to a third of millennials could be renting for the rest of their lives according to a new report and the pound has returned to its post-Brexit vote high after a fall in unemployment.

This week’s roundup includes news that Wages overtake inflation to end squeeze, up to a third of millennials could be renting for the rest of their lives according to a new report and the pound has returned to its post-Brexit vote high after a fall in unemployment.

Wages overtake inflation to end squeeze

Wage growth rose to 2.8% in the three months to February, outstripping inflation for the first time in a year, official figures show.

The figures from the Office for National Statistics (ONS) signal an end to the squeeze on household incomes after a slump in the pound following the Brexit vote drove the cost of living higher.

Inflation had topped 3% in recent months but has eased, dipping to 2.7% in February.

The return to real terms wage growth will revive hopes for the high street, where retailers have been struggling thanks to the strain on consumers’ finances.

It should also keep up expectations that the Bank of England will raise interest rates to 0.75% next month.

Up to a third of millennials ‘face renting their entire life’

Up to a third of young people face living in private rented accommodation all their lives, a new report by the Resolution Foundation has found.

The think tank said 40% of ‘millennials’ – those born between 1980 and 1996 – were living in rented housing by the age of 30.

That was twice as many as ‘generation X’ – those born between 1965 and 1980.

The Foundation’s Home Improvements report said “generation rent” needed much more help. It called for more affordable homes for first-time buyers to be built, as well as better protection for those who rent.

The report reveals that a record 1.8 million families with children rent privately, up from 600,000 15 years ago.

Pound remains close to post-Brexit high

This week the pound has hit its highest level since Britain’s vote to leave the European Union in June 2016.

On the morning of the 17^th April, the pound gained more than 0.2% to $1.437 in morning trade, beating a post-Brexit-vote high set in January.

However, the pound fell back slightly following official employment data showing that wage growth continued to lag one measure of inflation.

Sterling has been boosted by expectations that the Bank of England will raise interest rates.

The Bank of England has said it expects the fall in unemployment to start pushing up pay more quickly, which is the main reason why it has said it is likely to raise interest rates more quickly than it previously thought.

This is because it was recently announced that unemployment in the latest three-month period fell by 16,000 to 1.42 million, with the 4.2% unemployment rate the lowest since the three months to May 1975.

Primark and JD Sports buck UK retail gloom

Associated British Foods, owner of Primark, has hailed the clothing chain’s UK performance as ‘remarkable’ after a boost in like-for-like sales.

However, the UK results were not enough to offset a decline in Primark’s same-store sales overall.

Retailer JD Sports also reported a rise in sales, which it said was ‘an excellent result’.

The UK results of both firms come despite the crisis faced by some High Street chains.

In the 24 weeks to 3 March, Primark saw 3% growth in its UK like-for-like sales, which strip out the effect of new store openings.

Chains on the UK High Street have been facing a combination of a squeeze on incomes and rising overheads. Prezzo, New Look and Carpetright are among the big names that have been struggling recently.