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UK unemployment steadies, as wage growth drops

LONDON (AFP) – United Kingdom (UK) unemployment steadied and wages growth retreated in October, according to official data yesterday that is likely to influence the Bank of England’s next moves on interest rates.

The unemployment rate came in at 4.2 per cent, unchanged from September’s reading, the Office for National Statistics said in a statement.

Average wages jumped 7.3 per cent in the 12 months to October but this was down on the 7.8-per-cent reading in the year to September, the ONS added.

It was the steepest fall in earnings growth for nearly two years, while the data comes ahead of the Bank of England’s (BoE) latest decision on UK interest rates due tomorrow.

With the BoE widely expected to keep borrowing costs steady, markets will be looking for clues in minutes of the meeting on when the BoE would begin cutting interest rates as inflation cools.

“The sharp fall in wage growth in October will probably further fuel investors’ expectations that interest rates could be cut as soon as the middle of next year,” said Ashley Webb of Capital Economics.

A pottery worker puts final touches on ornamental vases at Wedgwood factory in Stoke on Trent, England. PHOTO: AP