Car Buyers in the UK Optimistic after Latest News from the ONS
Although the news on the economy in the UK isn’t all good, it isn’t all bad either. On 21 February, the Office for National Statistics released the latest data on the state of the economy in the UK and while three key areas are seeing improvement, there is still one area of slight concern.
Unemployment is up just a bit, rising for the first time in two years. Even so, with good news in other key data indicators, car buyers are increasingly optimistic, and many will begin looking for new or previously owned cars. Why the optimism? Good news from the ONS and a hint of news from the BoE.
Perhaps the Recession Has Truly Receded
Even though unemployment rates are up slightly over the past quarter, they are not high enough to discourage potential car buyers from seeking guaranteed car finance. If you are wondering why buying a car is so important after the latest data released by the ONS, bear in mind that many put buying a new car on hold because of the lack of job stability and the fear of what the impending Brexit may mean for the economy. It doesn't appear as though Brexit is an issue because productivity continues to rise. In fact, for two consecutive quarters, the UK has seen a rise well above trends of recent years. At 0.8 percent, this is the second highest quarter since 2011 when the economy looked as though it would turn around.
Margin between Wage Growth and Inflation Set to Narrow Even More
Even though unemployment is up, wage growth continues to rise slowly for those who are employed. Data released from the ONS indicate that wage growth for the quarter was 2.5 percent, a hike on the previous quarter where it was at 2.3 percent. However, that figure needs to be balanced against the rate of inflation, which is still higher than wage growth, not including bonuses.
Here is where the news might be a bit brighter. Some news reports are saying key officials at the BoE are hinting at interest rate hikes, which would spur growth in the economy. If, and when, they do raise the interest rates, the margin between wage growth and inflation will be that much less.
UK Deficit Continues to Fall
According to an article on the BBC website, the deficit in the budget is down as well from a year earlier to £7bn. Earlier on, it was forecast that the deficit would be £49.9bn, but recent trends have re-evaluated that figure, bringing the deficit down to £45bn or less. This is good news, after all. There was much fear over the impact Brexit would have among businesses in the UK, but that fear is being assuaged by the day as new figures continue to emerge.
In all, the only very small cause for concern is the rate of unemployment, which is only slightly up over the previous quarter. Some analysts feel that this is only a temporary issue which will be resolved once the expected BoE rate increases and Brexit are finally accomplished. The good news for car buyers and sellers is that the market is now stronger and financing is once again available.