The Republic of South-East England? A low tax haven comprising of London and the surrounding counties? Any region with a public expenditure to GDP ratio of less than 40 percent can join.

Productivity down, unit labour costs up - the recipe for unemployment

Very worrying, that is the only way to describe first quarter labour market developments. Productivity fell dramatically, while unit labour costs surged.

The two indicators point to a future rise in unemployment. Slowing productivity suggests that output is sliding south, but the number of workers producing that output has remained largely unchanged. In other words, firms have too many workers.

There is only one thing firms can do; in order to reduce labour costs and increase output per worker, firms need to start shedding labour.