with us now is yael selfin, chief economist at kpmg. welcome.ellor say last night in his speech? very interesting. on the one hand he was very much saying we will need to continue hopefully trading closely with the eu. but on the other hand he was saying actually we have a rigorous and strong regulatory environment here for financial services. therefore we want to keep that. and we want to be trusted and trade in financial services in a slightly different way to watch the european commission is proposing. there is a disconnect uttering what some ministers, like the foreign office, might think about it and how the treasury is perceived. —— there isa the treasury is perceived. —— there is a disconnect with what some ministers. i think he was really positive in this end he was really trying to go towards business and try to find what they want out of brexit, so hopefully he has done quite a lot. and of course he needs more money, doesn't he? in terms of getting enough to boost nhs spending. do you think he has wriggle room within what is going on n

earlier, we asked yael selfin, chief economist at kpmg in the uk, why falling unemployment isn't translatinglatively strong labour market overall, and we're seeing an increase in vacancies across the board, really. so the issue's not so much with the labour market, but actually with output. so in the similar three months to april, we've seen output that was relatively sluggish compared to last year. and what it means is, in terms of productivity, it's not really that great, and therefore it gives less room for businesses to increase wages. joining us now is james hick, managing director of manpower. james, thank you forjoining us. the productivity problem was mentioned there, we'll come back to that in a minute. but you would tell a slightly different story to the falling unemployment figures the 0ns has released today. what have you been finding out with yellow survey is telling us that as we look forward into the third quarter of this year, there are two for a large sectors of the jobs economy that are looking really quite gloomy, as employers think about if they are going to hire. that is

joining us now is yael selfin, chief economist at kpmg in the uk.s always the type of jobs that are created that the issue, isn't it? well, we are seeing a relatively strong labour market and increasing vacancies across the board, really. the issue is not so much with the labour market but in the three months to april we've seen output that was relatively sluggish compared to last year. and what it means is in terms of productivity, productivity is not really that great. and therefore it gives less room for businesses to increase wages. that's just room for businesses to increase wages. that'sjust be really clear, what we are seeing is more people working, injobs, but as a country we are not producing as much as we should be given that level of employment. as we should be. we have a very strong labour market, as this is relatively confident and it gives confidence for households to spend. but the output as a result of that is not as high as we would want it to be. why not? we know this is called a product evictee puzzle, but explain here if you come