Fathom’s Chart of the Day 26.08.2020 – UK labour share of income rockets
Q2 saw the share of national income accounted for by labour compensation in the UK rocket. But this is mostly a denominator effect: national income collapsed, while furloughed employees have maintained all or most of their income. Once the furlough scheme is withdrawn, there is a risk that many of these people will be stranded in unemployment. Their income will fall, and so will their spending. Unless there is aggressive action taken now to avert this risk, it could easily lead the UK (and the global) economy into an L-shaped ‘recovery’.
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This chart is taken from Fathom’s Recovery Watch newsletter. Click here to subscribe to Recovery Watch.
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