Wages are being driven up by a lack of skilled workers in the UK today, according to a new report.
Almost a third of recruiting agencies have said that starting salaries are increasing, says KPMG and the Recruitment and Employment Confederation (REC).
Wage growth is strongest in the Midlands and the south of England, where the availability of suitable candidates for jobs continues to fall.
Skills shortages are a particular problem in nursing, health care and teaching.
The chief executive of REC, Kevin Green, said that almost one in three recruiters is reporting an increase in starting salaries compared with last month. There has also been a rise in the number of people successfully finding work via a recruiting agency. In the north west of England, 45 per cent of recruiting agencies surveyed by KPMG and REC said that there had been a sharp increase in the number of permanent staff appointments made.
People are feeling more confident about finding work and also about changing jobs, as they seek higher salaries. Higher salaries are being offered because of a widespread shortage of skills. Kevin Green warned that businesses will have to work hard to retain their skilled staff in the future.
Shortages are being most keenly felt in the public sector, with teachers, nurses and other health care workers in particularly short supply, for both temporary and permanent positions.
Mr Green added that politicians are debating immigration and education in the run up to the election and need to be aware that the current skills shortage is likely to have a significant impact upon the UK’s economic growth.
Bernard Brown of KPMG said that demand for talent continues to outstrip the number of candidates seeking employment and that this skills shortage is likely to slow down UK economic growth if it is allowed to continue at its current rate.
The government backed pension bond scheme announced by the government last March will be extended to the end of May, George Osborne has said.
Under the scheme, pensioners have, since January, been able to buy bonds that offer competitive interest rates of up to 4 per cent.
The Chancellor said that the scheme is being extended to May because it has been ‘immensely successful and popular.’ The deadline for buying pension bonds will now be one week after the general election.
More than 600,000 people over the age of 65 have already signed up and £1 billion were sold in the first two days of the scheme alone.
The one year bond available pays an annual interest rate of 2.8 per cent, while the three year bond pays 4 per cent. Interest will be added annually on the anniversary of the investment. Pensioners are limited to investing £10,000 in each bond, an individual limit of £20,000.
The best one year bond available to everyone is currently offering 1.85 per cent interest and the best three year bond pays 2.5 per cent, 1.5 per cent below the pension bond.
National Savings and Investments currently offer up to £10 billion worth of bonds but George Osborne said that this will be extended to £15 billion.
The scheme is not without its critics, however. Some experts have been saying that it is not fair that younger people are subsidising a scheme from which only well-off pensioners can benefit.
Director General of the Institute for Economic Affairs, Mark Littlewood, said that the scheme proves that the British public is not ‘all in it together.’ Pension bonds are nothing more than a gimmick, he said, that benefits wealthy pensioners at the expense of the working age population.
Evolution Money are once again celebrating today after impressively scooping their second award so far this year, and winning the coveted Financial Reporter Awards, Best Secured Loan Lender 2015.
Rhian Roberts, Head of Evolution Money Broker Division commented:
‘What a fantastic result for Evolution Money to be awarded Best Secured Loan Lender of the Year in this year’s Financial Reporter awards. This award once again proves that our robust stress testing, responsible lending and dynamic product mix is very highly thought of throughout the industry. A huge thank-you to all our brokers and introducers who have voted for us, it truly is an a amazing result’
The significant accolade which garners votes from industry peers and professionals alike not only recognises top-notch excellence across the lending arena but how important and well-respected Evolution Money has become within the industry over the past four years. Offering a wide-ranging suite of secured loan products which match customers’ needs and requirements, Evolution Money has grown significantly to be a key player in the second charge sector.
Earlier on in the year the specialist lender won Best Adverse Secured Loan Product of the Year 2014 at this year’s Loan Talk Secured Loan Awards. Today’s award follows on from last year’s 2014 Financial Reporter Awards where Evolution Money received a Highly Commended rosette as Best Specialist Lender.
Operations Director Kerriann Turtill said about winning the award:
“Once again Evolution Money continue to stand-out as a market leader. These awards are key industry benchmarks which recognise our innovative approach, and we are very excited and proud to have won Best Secured Loan Lender 2015. Relationships with our partners are important to us – We know our products meet the needs of ours and our broker partners’ customers, and the award is key to acknowledging that as it was voted for by our industry peers and professionals which we work with on a daily basis’’
The winners’ presentation ceremony will take place on 19th May 2015, at Manchester Museum of Science & Industry. Attended by this year’s victors, runner-ups and industry professionals, the event should prove to be an evening to remember.
For a full list of all the winners please go tohttp://www.financialreporter.co.uk/awards/winners-2015/
Chancellor George Osborne has said that the Conservative Party has no plans to lower the top taxation rate should they win the next election. The Labour Party accused him, however, of refusing to rule such a move out.
Labour called on the government to promise that it will not cut the highest rate of taxation, which is currently 45 per cent for those who earn more than £150,000 per year. The Coalition government reduced the top rate from 50 per cent to 45 per cent in 2013.
Ed Balls, the shadow chancellor for the Labour party, criticised Osborne’s refusal to say categorically that he will not cut the top rate.
George Osborne was speaking to Sky News when he said that it is not ‘our plan’ to introduce a five per cent cut to the highest taxation rate. When asked if he was prepared to rule out such a cut explicitly, he replied that the Conservative Party planned to increase the tax free personal allowance to £12,500, so that people who work full-time for the minimum wage will not have to pay tax. He also said that his party intends to increase the amount people must earn before they pay the higher tax rate of 40 per cent, to £50,000. It is currently at £42,400.
David Cameron said that a cut to the top rate is not part of their policy or plan. The Labour Party has made a commitment to re-introduce the 50 per cent top taxation rate, should it win the next election, for people earning more than £150,000. It has also pledged to cut and then freeze taxation rates for small businesses.
Both the Liberal Democrats and Labour have promised to introduce a mansion tax on homes with a value of more than £2 million.
British households are overpaying for their energy consumption according to a number of comparison websites. Sites, such as Uswitch.com, energyhelpline.com and theEnergyShop.com, have said
that household energy bills should fall by at least £140 a year for standard tariff customers but the six main electricity and gas suppliers are not passing on the recent drop in energy prices.
Chancellor, George Osborne, has said that the big six energy companies should bring down their customers’ bills and they will be subject to a Treasury investigation if they do not.
Petrol retailers have also been criticised for their reluctance to share the new lower prices of fuel with their customers.
So far, none of the six main energy companies has cut its standard tariffs, which are used by the vast majority of UK households. Customers typically pay £1,200 per annum for their gas and electricity. Smaller suppliers, however, are now offering new customers tariffs costing less than £900 per year. The cost of wholesale gas has fallen by thirty per cent since the summer and the cost of electricity by fifteen per cent.
Joe Malinowski of price comparison website, TheEnergyshop.com, said that if the drop in fuel prices was passed onto UK customers, households would see a saving of at least £140 each year. Customers currently following a standard tariff may be able to save as much as £320 per year, if they switch suppliers.
Tom Lyon, of uSwitch.com, said that it is now high time one of the big six dropped their standard tariff in order to encourage the others to do so. He added that they are always very quick to raise their prices and it is very disappointing that they are not similarly quick off the mark to lower them. Mark Todd, of energyhelpline.com agreed, saying that customers are being punished for staying loyal to an energy supplier.
While the economic well-being of UK households has improved, it is still not significantly better than it was five years ago, according to the Office of National Statistics (ONS).
Using a new set of measures, ONS is able to measure economic well-being as well as economic growth.
Real Household Disposable Income (RDHI) increased 1.9 per cent per head during 2014. However, this was only up by 0.2 per cent on the figure for the second quarter of 2010, five years ago.
Real Household Disposable Income is the measure favoured by Chancellor George Osborne. It records household income after tax, adjusted for inflation.
According to the Office of National Statistics, adults are also feeling more optimistic about their household finances.
In December 2014, the ONS reported a figure of -5.2, which meant that the number of people who reported feeling optimistic about their personal finances was just outweighed by the number who felt that their finances were worsening. However, the year before that figure was -7.6.
According to the ONS, household spending has also increased. Real household spending, adjusted for inflation, rose by 0.3 per cent during 2014 and by 3 per cent since May 2010, when the current coalition government came to power.
These measures for quantifying economic well-being were first suggested by economist and Nobel Prize winner Joseph Stiglitz, who said that it was important to look at individual household finances as well as the economy as a whole.
According to Stiglitz, measuring Gross Domestic Product alone is problematic. It records the depreciation of cars, for example, which is not usually connected with worsening household finances. Furthermore, not all of the GDP goes to UK nationals. Some is taken by investors from overseas and some UK residents receive income from foreign investments. Finally, GDP goes up as the population increases and so should be calculated per head.
Cases of online banking fraud rose by 48 per cent during 2014 as more and more consumers choose to carry out their banking via the internet.
According to Financial Fraud Action the rise is due to an increase in the distribution of computer malware and to people being conned into giving their personal details to fraudsters.
Firms are also more likely to become victims of fraud, often losing large amounts of money.
£60 million was lost fraudulently last year but, says the FFA, this is a “relatively modest” amount given that over half of all adults in the UK use online banking facilities.
Overall customers lost a total of £479 million through fraudulent use of their bank cards. This was a six per cent increase on the previous year, 2013.
Customers who lose money via their bank card are eligible for a full refund unless it can be established that they have been negligent.
Judith Donovan, from action group Keep Me Posted, said that the sharp increase in online fraud shows that customers must be given the option of going into a bank to conduct their financial transactions, should they wish. Banks are encouraging their customers to bank online for convenience but crime in this area is increasing. This is a particular concern for those groups who are not familiar with online banking technology and feel vulnerable.
Whilst online fraud has increased, the overall amount is down by 21 per cent from its peak of £609.9 million in 2009. Keep Me Posted suggests that this is because banks have increased levels of security. Fraudsters are now concentrating on tricking individuals into giving them their bank details through email and telephone scams.
The campaign group is calling for the government to raise awareness of fraud and to encourage consumers to use the latest anti-virus software which is often available from their banks, free of charge.
The Royal Institute of Chartered Surveyors, RICS, has said that the dip in housing market activity and the slowing down in property price rises in many areas will not last long.
Demand for housing has slowed for the fourth month in a row in most regions of England and Wales. Consequently, the number of sales fell in every area except Humberside, Yorkshire and south west England.
RICS says that it is confident that the market will improve in ‘the medium term.’ Simon Rubinsohn is the chief economist at RICS. He said that the current slowdown is due to buyers exercising more caution since the rules surrounding mortgage applications were tightened. It also likely to be caused by some concerns that interest rates may rise before the next election, in May 2015.
The housing market in Scotland, however, is very different, RICS has said, and is experiencing a ‘post referendum bounce.’ The market in Northern Ireland is also continuing with its recovery.
With unemployment down and wages finally on the rise, RICS believes that the slowdown the housing market, which the rest of the UK is currently experiencing, will be short lived.
According to data from the Office for National Statistics, unemployment fell by 115,000 during the third quarter, June to September. Wages have risen by 1.3 per cent in the past twelve month period. Howard Archer, chief of IHS Global Insights, said that the slight rise in wages really began as recently as September, calling the increase a much needed step in the right direction.
The Bank of England’s deputy governor, Ben Broadbent, said that he expected wages to continue to outpace inflation at least until late spring of next year. Inflation may fall to 1 per cent, he said, whilst wages may increase by 3 per cent.
The consumer price index, the UK’s official measure of inflation, is at its lowest since records began in 1989. Falls in fuel and food prices have brought inflation to zero.
The index fell from 0.3 per cent in January to zero in February and is expected to fall still further over the coming months as the UK enters a period of deflation.
Experts had predicted a fall to 0.1 per cent rather than zero but the prolonged slump in fuel prices and a food price war between major supermarkets led to the lower rate. Fuel fell by 16.6 per cent during the past twelve months and food prices by 3.4 per cent, according to the Office for National Statistics.
Zero inflation brings a welcome boost to household incomes in real terms. Wages fell in real terms between 2009 and 2014 and were consistently outpaced by inflation. However, since late 2014 that trend has reversed, bringing more income into household budgets. Recent figures show that wage growth was at 1.8 per cent from November 2014 to January 2015.
Inflation was last close to the government’s target figure of 2 per cent in June of last year. Zero inflation means that the Bank of England is highly unlikely to raise interest rates in the near future.
George Osborne welcomed the report, saying that it was great news for family budgets.
Prices are expected to fall still further over the next few months as the slump in oil prices brings lower prices for petrol and heating. Costs to manufacturers and food producers will also fall. A weak euro means that imports are cheaper, which could also bring inflation down still further.
Whilst inflation has not been as low since comparable records were first kept in 1989, it is estimated that it might have been lower in 1960.
The chief economist of the Bank of England has said that UK interest rates are as likely to fall still further, from the current historic low of 0.5 per cent, as they are to rise.
Andy Haldane, member of the Bank’s Monetary Policy Committee, said that he couldn’t see a strong argument for either raising or lowering the rate.
Interest rates in the UK were lowered to 0.5 per cent in March 2009 and have remained at that level since.
Interest rates had been expected by experts to increase at some point later this year or early next year. The Bank hinted, however, in February of this year that it was prepared to cut rates still further if the economy needed extra stimulus.
Andy Haldane was speaking at a business lunch in Rutland and in a personal capacity rather than as a spokesman for the Monetary Policy Committee (MPC). During the lunch he said that if a computer program decided interest rates rather than the MPC, then interest rates would be reduced to zero per cent for twelve months or so.
Sterling suffered a sharp fall against the dollar following Mr Haldane’s comments. At one point, it fell by as much as 1.5 per cent although it has since recovered slightly.
During his speech, the MPC member said that the current low level of interest rates is due, in part, to continued low economic growth. Whilst the situation has improved slightly over the past two years, with growth being a little stronger than expected, inflation has failed to rise as much as the Bank forecast, particularly during the past twelve months. It is currently at an all-time low of 0.3 per cent.
The MPC believes that inflation will continue to remain close to zero in the short term, taking two years to rise to the government’s target figure of 2 per cent.
Representative 17.46% APRC (Variable)
For a typical loan of £23,120 over 120 months with a variable interest rate of 17.46% per annum, your monthly repayments would be £442.07. This includes a Product Fee of £2,312.00 (10% of the loan amount) and a Lending Fee* of £763.00, bringing the total repayable amount to £53,047.80. Annual Interest Rates range between 8.6% to 27.87% (variable). Maximum 50.00% APRC. *Lending Fee varies by country: England & Wales £763, Scotland £1,051, Northern Ireland: £1,736.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
