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20
MAR
2017

Weekly Round-up, 17th March 2017

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Basket Case

Grocery ShoppingNon-dairy milk, such as soya, rice and oat milk, are being added to the ONS’s inflation basket for the first time, reflecting the increase in the popularity of dairy-free diets, with the rise of campaigns such as “Veganuary”. In addition, gin is returning to the basket after a 13-year absence, with gin consumption on the rise, partly thanks to the significant growth in the number of small gin producers.

Also returning are Bicycle helmets after a 12-year absence, following the significant increase in the popularity of cycling due to sporting successes by British cyclists in the Olympics and the Tour De France. Children’s scooters, which have proven highly popular in recent years, are also being added, replacing children’s swings.

Basic mobile phone handsets are, however, being removed from the basket as their decline in popularity, following the rise of smartphones, has been making it difficult to collect consistent prices for them.

In addition, council tax is being added to CPIH, which includes owner-occupier housing costs and is the most comprehensive measure of consumer inflation. As well as updating the goods and services that are included, ONS also updates the weight each item has within the basket to ensure the overall inflation rate reflects households’ spending habits as closely as possible.

Lower Rentals

To Let SignsFebruary’s Countrywide Lettings Index shows that rents in Great Britain were lower than in the same month last year, the first annual drop since November 2010. Nationally rents fell 0.6% over the last year with, in February, the average rent in Great Britain £921 a month, £5 less than in February 2016. But rents are still £112 (14%) a month more than their previous peak in 2007.

The fall in the average national rent was driven by London and the South East where the cost of a new let fell 4.7% and 2.6% respectively. The research suggests it has taken seven months for falls in these regions to bring the national rental growth figure below 0%. Apart from London and the South East, every other region of the country saw rents continue to rise, albeit at a slower rate than last month. Outside London rents rose 0.8% year-on-year, but the rate of growth slowed in nine of the eleven regions in Great Britain. The East and West Midlands were the only regions recording faster rental growth in February than in January.

The slowdown in average rental growth is probably driven by a fall in the number of tenants looking for a home combined with higher numbers of homes available to rent in London and the South East. While in Great Britain there were 5% more tenants looking for a home than at the same time as last year, London (-3%) and the South East (-5%) both had fewer tenants looking than last year (table 1). There was more tenant demand in every other region of the country with the biggest increases in the East Midlands, the East and the North West.

The surge in the number of homes available to rent following the rush to beat the stamp duty deadline is now beginning to subside. There were 10% more homes available to rent nationally in February 2017 than last year but the rate of growth has halved since last month. London, the South East, the South West and the East of England were the only regions to record double digit growth in the numbers of homes available to let. The increased level of stock available is likely to continue bearing down on rental growth in the coming months.

Stay Safe

Credit Card ShoppingCifas, the UK’s leading fraud prevention service, has released new figures showing that identity fraud has hit the highest levels ever recorded. A record 172,919 identity frauds were recorded in 2016 more than in any other previous year. Identity fraud now represents over half of all fraud recorded by the UK’s not-for-profit fraud data sharing organisation (53.3% of all frauds recorded to Cifas), of which 88% was perpetrated online.

The vast majority of identity fraud happens when a fraudster pretends to be an innocent individual to buy a product or take out a loan in their name. Often victims do not even realise that they have been targeted until a bill arrives for something they did not buy or they experience problems with their credit rating. To carry out this kind of fraud successfully, fraudsters need access to their victim’s personal information such as name, date of birth, address, their bank and who they hold accounts with. Fraudsters get hold of this in a variety of ways, from stealing mail through to hacking; obtaining data on the ‘dark web’; exploiting personal information on social media, or though ‘social engineering’ where innocent parties are persuaded to give up personal information to someone pretending to be from their bank, the police or a trusted retailer.

Cifas has seen growing numbers of young people falling victim in recent years and this upward trend continued in 2016 with almost 25,000 victims under 30. In particular they saw a 34% increase in under 21s, and therefore Cifas is again calling for better education around fraud and financial crime and urging young people to be vigilant about protecting their personal data. 2016 also saw increases in victims aged over 40, with 1,869 more victims recorded by Cifas members.

Steady As She Goes

National Minimum WageThe remit of the Bank of England’s Monetary Policy Committee (MPC) is to set monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 15 March 2017, the Committee voted by a majority of 8-1 to maintain Bank Rate at 0.25%.

The Committee expects a slowdown in aggregate demand over the course of this year, as household demand growth declines in reaction to lower real income growth. Official estimates of retail sales have weakened notably, consistent with this expectation, although other indicators of consumer demand such as consumer confidence have been steadier.

CPI inflation increased to 1.8% in January, and the MPC expects it to rise above the 2% target over the next few months, before peaking at around 2.75% in early 2018 and drifting gradually back down towards the target thereafter. The projected overshoot entirely reflects the expected effects of the drop in sterling. Pay growth has remained subdued, while measures of inflation expectations remain at levels broadly consistent with the achievement of the inflation target. Eight members thought that the current stance of monetary policy remained appropriate to balance the demands of the Committee’s remit. Kristin Forbes considered it appropriate to increase Bank Rate by 25 basis points.

Super Hero Wanted, Good Rate Of Pay

Job interviewSome of the strangest job titles have been revealed by Glassdoor, including Customer Happiness Hero and Genius. The recruitment firm said a study of thousands of vacancies on its site showed some interesting jobs as well as more traditional roles.

Among the weirdest were: A Tug Master – the person responsible for safe operations of a tug vessel, an Econometrician – a type of economist who integrates statistics and maths, a Customer Happiness Hero, a customer service job with a fancy name. If these weren’t attractive to the job hunter there was always room for a Genius – a troubleshooter at Apple stores and a Scrum Master – the facilitator for a development team.

A Glassdoor spokesman said: “We all have a pretty good idea what a finance manager, HR manager, electrical engineer and graphic designer does, but some jobs are a bit more niche, with weird and wonderful job titles that would have most people scratching their head to work out what the job actually is.”

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