The Oracle Spoke
Are we screwed?
**The labour market is softening, but the real story is structural stagnation.** Unemployment ticked up from 4.9% in January to what looks like low-5s territory (5.2% in Nov/Dec). Vacancies have dropped from 739,000 in November to 711,000 in February -- that's 28,000 fewer job openings in three months. Youth unemployment is stuck around 16%, which means we're still sacrificing a generation at the altar of "flexible labour markets." Meanwhile, economic inactivity jumped to 9.1 million people in January -- that's 9.1 million working-age adults who've just... left the building. Not unemployed. Not looking. Gone.
**Pay growth is decelerating into an inflation wall.** Regular pay growth dropped from 4.8% in October to 3.8% by February. CPI is running at 3.0-3.4%. So real wage growth has collapsed from a brief moment of actual gains back toward stagnation. We had *one quarter* where workers clawed back some ground, and it's already evaporating. That £741.80 real weekly pay in February? It's essentially flat since autumn when you account for the inflation trajectory.
**The trade position remains a structural disaster dressed up as services surplus.** Yes, we ran a £80.7 billion total surplus in February thanks to services exports. But goods? We're importing £720 million more than we export in a *good* month (February), and we hit -£5.9 billion in October. We've deindustrialized so thoroughly that we're a services entrepôt with no industrial base to fall back on when AI starts eating those white-collar jobs. That 80% services economy? It's not resilience -- it's exposure.
So no, we're not screwed in the sense of imminent collapse. We're screwed in the sense that we're locked into a low-growth, low-wage, high-inactivity equilibrium where the only thing holding up consumption is consumer credit and the only thing holding up asset prices is monetary policy. That's not an economy. That's a Ponzi scheme with a trade deficit.