By Taye Obateru
Figures from the Office for National Statistics released this week indicate an improvement in the economy of the United Kingdom with increase in retail sales, lower inflation and a stable unemployment rate.
The volume of retail sales in May 2015 was estimated to have increased by 4.6 per cent compared with May last year, thus continuing a year-on-year growth. The volume was the 26th consecutive amount of year-on-year growth and the largest period of sustained growth since 2008 when there were 31 periods of growth, according to the official figures.
The non-food retail sector made the highest
contribution to the volume from May 2014 to May 2015 out of the major four retail sectors.
The inflation rate in the UK also returned to a positive trend, rising 0.1 percent after an unexpected fall in the previous month, a situation attributed to the increase in air and other transportation fares.
Similarly, UK unemployment remained stable at 5.5 per cent, while the wage growth also steadied at 2.2 per cent. Employment increased with more 114 thousand people at work than the three months to January, this year. Wages also rose to a near four-year high.
Employment Minister, Priti Petel said the figures “confirms that our long-term economic plan is already starting to deliver a better, more prosperous future for the whole country, with wages rising, more people finding jobs and more women in work than ever before.”
Ian Steward, Chief Economist at Consultants Delloitte predicts a relatively steady outlook in the coming months despite the possibility of up or down movements. “The big picture if of very weak pressures. Inflation is unlikely to rise significantly above the zero mark for the rest of the year”, he said.
Similarly, the situation in the Eurozone is seen to be fairly stable despite the 0.3 per cent inflation index for May released by Eurostat. The rate dropped from the 0.6 per cent recorded last year.
However, negative annual rates were observed in eight member states in May 2015, with the lowest rates recorded in Cyprus (-1.7%), Greece (-1.4%) and Slover (-0.8%).
According to the statistics, annual inflation fell in two member states of the Eurozone, remained stable in three and rose in 23.
Moody’s Analytics believe that with the released figures, the deflation worries in the zone are lessening but predicts a higher inflation index in the coming months with improving economy weaker euro and higher oil prices.
Tomes Holinka, an economist at Moody’s Analytics projected a 0.4 per cent growth in the second quarter as low oil prices is expected to boost domestic demand while exportation from the zone is likely to benefit from a weaker euro.
In the United States of America, manufacturing did not rise as expected, but rather fell 0.2 per cent month-on-month. The Wellsfargo Securities Economic Group described the development as the most disappointing part of the statistics released during the week.
US Federal Reserve announced that industrial output fell by 0.2 per cent, six months in a stretch as against 0.2 per cent growth earlier predicted. This was blamed on the challenges of a strong dollar and the drop in energy prices,
Activities in the mining sector also declined with output falling 0.3 per cent compared to oil and gas extraction which rose 0.5 per cent in May indicating a possible fall in extraction in the second half of the year as a result of pull back in new investment.
Some analysts also said there are indications that activities in the manufacturing sector might remain sluggish in the near term.
Inflation rose by 0.40 per cent in May, short of the 0.50 per cent predicted. Notwithstanding, the Labour Department figures showed that inflation over a 12-month period was at zero per cent level and the record for May is the fastest gain in over two years.