18th August 2021
Good morning It must be every chicken shop restaurant's nightmare - running out of chicken - but that's what happened to Nando's. The chain was forced to shutdown 50 outlets after low supplies of its famous peri peri chicken.
Job market on the up
What now for Afghan economy
Yesterday's market moves
FTSE 100 +0.4% 7,181 FTSE 250 -0.1% 23,694
After a drop right at the open, the UK market spent the day trying to convince investors everything’s fine. The FTSE 100 managed to sneak into the green as brighter employment stats (more below) replaced worries over an economic slowdown in China.
ECONOMYJob market on the up
What’s going on?Figures published by the Office for National Statistics (ONS) for the three months to June showed that the UK job market is well on the road to recovery and doing better than economists expected:
Unemployment rate dipped by 0.1% to 4.7%.
Job vacancies hit a record high of 953,000 in May to June, surpassing 1m in July.
Average earnings rose from 6.6% to 7.4%.
Why is this important?
The labour market is coming out one of the biggest economic shocks in living memory and is doing so with some gusto.There are now more employees on payrolls than at any point since March 2020 and the number of people on furlough is the lowest since the scheme launched.The lifting of lockdown restrictions has led to a surge in demand for workers which has reflected in the strong wage growth. Changes to the business environment, such the rise in online commerce has increased the need for skills, from IT specialists to hauliers.At the same time there has been a fall in demand for workers in sectors such as travel which has caused an unusually high level of skills mismatch in the job market.
TakeawayLast year as economy shutdown many thought that it would take a long time for the labour market to recover. However it has outperformed expectations and the growth has led to unprecedented levels of job vacancies and wage increases. In short now is a good time to be a worker.
GEOPOLITICSWhat now for Afghan economy
You will have undoubtedly seen the shocking images from Afghanistan where this week the Taliban, an Islamic fundamentalist group, regained control of the country after 20 years. As the fallout continues, attention is turning to what the implications will be for the Afghan economy.Earlier this year the World Bank described the economy as fragile and aid dependent with employment concentrated on low productivity agriculture.Afghanistan is richly endowed with natural resources like precious stones, copper, cobalt, lithium as well as oil and gas. In 2010, a report by US military experts and geologists estimated that these minerals were worth nearly $1 trillion. However like a lot of countries in precarious political environments, these resources have not been fully exploited with ordinary Afghans not reaping the benefits.While the West has threatened not to work with the Taliban, China, Russia and Pakistan are lining up to do business with the militant group.Afghanistan also has a huge position in the illegal drug trade, according to the UN 84% of all the world’s opium was sourced from Afghanistan from 2015–20. The Taliban's biggest source of income is from trafficking opium, heroin, and increasingly meth, raking in hundreds of millions of dollars.Now that the Taliban has control there are concerns that it could flood the West with heroin to support the economy, especially if foreign aid is withdrawn.
Stat of the day
Today American CEOs make 351 times more than workers, in 1965 it was 15 to one
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