16  BIS central bankers’ speeches  Appendix Chart 1: Unemployment rate and projections  Chart 2: Cumulative Employee growth by skill level Cumulative increase since 2010Q1, thousands  Unemployment rate , % 12  16+ Unemployment Rate February 09 IR projection February 14 IR projection  1,800 Highly skilled  1,600  Medium skilled  11  1,400  Low skilled  1,200  Total  10  1,000  9  800  8  600 400  7  2006  2008  2009  2010  2012  2013  2014  200  6  0  5  -200  4 2016  2010  2011  2012  2013  2014  2015  Source: ONS and Bank calculations  Source: ONS and Bank calculations  Chart 3: Percent of 18–24 year olds not in employment, education or training  Chart 4: Nominal and Real total pay growth  Per cent  18  Real pay growth  17  Total nominal pay growth  -400  Per cent yoy  6  16  4  15  2 0  14  -2  13  -4  12  -6  11  2010 Q2 2011  2012  Source: ONS Labour Force Survey  BIS central bankers’ speeches  2013  2014  2015  8  10  -8 2005  2007  2009  2011  2013  -10 2015  Source: ONS and Bank calculations  17  Chart 5: Percentage of people in employment who would like to work longer hours Per cent  Chart 6: Percentage of people in employment on a zero hours contract Per cent  12  3  11  10  2  9 1  8  7  2005  2007  2009  2011  2013  6 2015  2000  2002  2004  2006  2008  2010  2012  2014  0  Source: ONS Labour Force Survey Notes: Responses to the Labour Force Survey can be affected by respondents recognising the term “zero-hours contract”.
Holding flat the labour share may be too strong an assumption if the UK continues its cyclical rebound. Nonetheless, even the rise in wage growth seen through this year appears to have subsided somewhat over recent months. Shorter-term measures suggest annualised rates of pay growth of around 1 to 1.5% in Q3, down from 2.5 to 3% in Q2. Wage growth appears to be fizzling. And, of course, those are not the only potential downside risks facing the UK. World events have added to those downside skews over the past few months. There is now rather more convincing evidence of a gentle slowing in the UK and world economies since the summer. In the UK, this gentle slowing has been apparent since the middle of 2014. It leaves growth, in the UK and globally, little more than trend. Growth could accelerate in the period ahead, with the cost of credit at historically very low levels. Since the crisis, however, the pattern of UK output has been shaped less by the cost of credit today than by uncertainty about demand tomorrow. It was that uncertainty which cratered world demand in 2008. It was that uncertainty which flattened UK growth during the euro-area crisis of 2011–12. And it was the relief rally after that euro-area uncertainty abated which caused UK growth to bounce back during 2013–14. Uncertainty about demand is, once more, on the rise.