U.K. Real Wages Fall, Unemployment Hits 42-Year Low

The video discusses the economic challenges faced by consumers due to low wage growth and rising living costs, despite a decrease in unemployment. Earnings have increased slightly but lag behind inflation, leading to reduced spending power. The decline in sterling post-Brexit has further driven inflation. The labor market shows healthy demand, with employment reaching record levels, yet wage growth remains subdued. These factors contribute to the Bank of England's dilemma over interest rate decisions.

What is the main reason for the erosion of consumer spending power?

• Decreased consumer confidence

• Increased government taxes

• Feeble wage increases and rising living costs

• High unemployment rates

How much did regular earnings rise in the three months through May?

• 4%

• 3%

• 2%

• 1%

What was the inflation rate increase year on year?

• 1.5%

• 2.0%

• 2.9%

• 3.5%

What was the unemployment rate after the fall of 64,000 unemployed people?

• 4.0%

• 4.5%

• 3.5%

• 5.0%

What dilemma is the Bank of England facing?

• Whether to decrease unemployment benefits

• Whether to increase public spending

• Whether to raise interest rates

• Whether to increase taxes