What's going on?

We�ve reported about how the Brexit is making life difficult for the UK economy. And yet, in April, Britain�s unemployment rate fell to its lowest level (5%) in more than 10 years!

What does this mean?

It�s good news partly because the total number of people in employment in Britain increased (it wasn�t just a case of potential workers giving up looking for work) � i.e. more jobs were created. But not only that: wages grew more than they did in recent months (+2.3% versus one year ago). The news suggests that the uncertainty of the Brexit referendum might not be weakening the economy as much as has been feared.

Why should I care?

The bigger picture: It might be time to start getting positive on the European and British economies. Recent data in Europe has suggested that the economy continues to do reasonably well after a strong first quarter. The UK�s economic growth was poorer at the start of the year, but the combination of this employment data and decent economic data released last week suggests that the British economy is probably picking up moderately this quarter. And that�s despite the huge uncertainty caused by the Brexit vote, which could be over within 8 days � and we could then start talking about the benefits of a modestly improving economy.

For you personally: British pay is looking pretty good after accounting for inflation. If you account for inflation (i.e. price rises in the overall economy), wages grew 1.7% for the past year (a.k.a. �real� wage growth). That essentially means that the average Brit has 1.7% more to spend this year than last. Don�t get too excited though: this �real� wage growth probably won�t go much higher as inflation and wages tend to work in tandem (e.g. if workers get paid more, the economy tends to adjust by raising prices). But it�s still good!