Afternoon summary
Time for a recap
Britain’s cost of living squeeze has intensified, after wages again failed to keep pace with inflation. Average earnings only rose by 2.1% in May to July, meaning real wages actually shrank by 0.4%.
Economists have warned that households are at “breaking point”, and blamed the fall in the pound after the Brexit vote for making imports pricier.
Low productivity, technological changes and the rise of the Gig economy are all also weighing on household incomes.
The government, though, has hailed news that Britain’s unemployment rate has hit a new 42-year low of 4.3%. That’s because an extra 379,000 people joined the labour force in the last year.
Employment minister Damian Hind says:
“The strength of the economy is helping people of all ages find work, from someone starting their first job after leaving education, to those who might be starting a new career later in life.
“Britain’s employment success is largely about a growth in full-time and permanent work, as employers invest in Britain and offer quality job opportunities that put more money into people’s pockets.
“But there is more to do, and we will continue to build on our achievements through our employment programmes and the work of Jobcentre Plus.”
But the surprisingly weak earnings figures has hit the pound, which has fallen back from a one-year high against the US dollar.
City experts believe the poor wage figures will make it harder to raise interest rates, with one think tank estimating that workers are £309 worse off than a year ago.
The Bank of England meets tomorrow, and could be split 6-3 over whether to hold borrowing costs or raise them.
Helal Miah, investment research analyst at The Share Centre, says the economy looks fragile:
With consumer’s real incomes falling, they are becoming more cautious and spending less. This is reflected in the increasing number of retailers with profit warnings or expressing cautious outlooks.
And that’s a good moment to stop. Thanks for reading and commenting!
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Anger in the streets if Athens boiled over this morning with police firing tear gas at protesting workers from the Canadian-owned Eldorado Gold mine company.
Helena Smith reports from Athens.
Police fired off rounds of tear gas at an estimated 100 workers protesting against potential job losses outside the energy ministry.
Officers said they took the unexpected action after demonstrators attempted to storm the building shouting: “we won’t leave until workers permits are handed out.”
Tensions have mounted since the Vancouver-based company threatened to pull out of Greece – effectively dismantling the country’s biggest foreign investment – because of endless delays in procuring permits.
George Burns, Eldorado’s chief executive, announced that operations would be halted on Monday only hours after prime minister Alexis Tsipras said his leftist-led government would do everything it could to welcome foreign investment. Under his personal stewardship, he said, a task-force dedicated to “Grinvestment” would replace fears of Grexit.
Around 2,000 people are employed by Eldorado which says its Skouries and Olympias projects in northern Greece have the potential to make Greece a leading European gold producer. Environmental concerns have prompted violent protests in what has become a test case of the government’s resolve to attract foreign investors.
And in the last few minutes, the government appears to have caved in and said it will be issuing licenses for Eldorado to press ahead with investments in northern Greece.
The energy minister Giorgos Stathakis said necessary paperwork “will be concluded in the coming days, today and tomorrow. Three permits will be issues … allowing Olympias to be fully operational.”
