Recession? What recession?
For the vast majority of gainfully employed people in Britain, the recession was a non-event, says Merryn Somerset Webb. In fact, things have been pretty good.
I participated in a round table for the Financial Times held at the wonderful Library of Mistakes last week (if you haven't visited this yet, go now!). You can read the transcript here.
At one point in our discussion, we talk about the impact the recession has had on income and finances across the UK. Anne Richards of Aberdeen Asset Management said that the odd thing about the recent economic recovery is that "it's felt to many people like it has never come." I challenged that.
It seems to me, I said, that for many people it is not that they haven't seen a recovery, but that, as far as their income goes, they have "never felt a recession". Anne said that she "fundamentally disagreed" with me on this matter, and some readers felt the same. Several people on Twitter and in the comments under the roundtable asked "what planet" I live on.
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The same one as the ONS as it turns out. Go here to the Annual Survey of Hours and Earnings for 2014 and scroll down to Figure 2.
The ONS has produced a chart (you can see the original here- go toto the Annual Survey of Hours and Earnings for 2014 and scroll down to Figure 2). The chart shows how the earnings of those in full time continuous employment have pretty consistently risen by more than inflation (2011 is the only exception).
Source: Office for National Statistics
In 2014, they rose at a rate of over 4%, suggesting that in inflation adjusted terms those in continuous employment saw a real rise in income of around 2% last year alone.
There are rather a lot of these people. Being in consistent employment is defined as having been in a job for a year or more from the survey date. 82% of the full-time UK workforce in their sample had been in their job for a year or more from the last survey date. Yes, 82%.
Now imagine that you are one of these 82% of full-time workers. You've seen regular rises in your inflation-adjusted income. Yet at the same time the interest rate you pay on your mortgage, car loans and the like has utterly collapsed. Have you just felt a terrible recession? Or have things really been pretty good? Quite.
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Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).
After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times
Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.
Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.
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