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It's still a bit too early for the Treasury to feel smug about the economy

 

James Moore
Thursday 14 May 2015 00:38 BST
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Outlook Reasons to be cheerful: wages are still rising at a faster rate than inflation. After several years during which they were largely falling in real terms, they are now clawing back some of the lost ground. Unemployment is falling too, and tight labour markets make for higher wages.

Reasons for feeling less than cheerful: that zero inflation you’ve been enjoying? Try not to get used to it. The same goes for zero interest rates. They’ll still be with us for a while, but an end might be in sight.

The Treasury will be happy. All this is good news. But it shouldn’t be too smug. Too many of those jobs are low paid. Productivity is still far too low. The Conservative government’s claim to economic competence won’t truly be credible until these, and other structural issues with the UK economy, are addressed.

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