So unemployment has fallen in the UK, very unexpectedly in the last quarter. Down only from 4.9% to 4.8%, but to fall during a lockdown is really quite something.
Clearly later this year there is going to be some fallout from the end of furlough, where a couple of million people might well suddenly lose their jobs and almost double the unemployment rate. However, as the economy bounces back the idea everyone is going to lose their jobs sounds less credible.
Also we lost 1 million people to the work force post-Brexit and Covid - a huge hit. It is why you can't sell a London property at the moment. This worker shortage is going to take up a lot of the Covid pressure. Meanwhile, high skilled labour is still in higher demand and short supply - all those data analysts and basically anyone who is an advanced computer use.
So we many even see, against expectations, some wage increase pressure later in the year and the beginnings of a large inflationary wave. With the new India variant in circulation, things might go a bit sideways for a while, but it is hard to see 2021 as a bad year outside of airlines and hotels.
This must all bode well for the markets and the economy as a whole for the near future. One day there is going to be a price to pay for the buoyancy we are seeing now sprayed around by the money printing and debt the Government has taken on. I think 2022 might be a much darker year than 2021 economy wise.
