LONDON (AFP) – United Kingdom (UK) wage growth accelerated more than expected, official data showed yesterday, cementing analyst forecasts that the Bank of England (BoE) will avoid cutting interest rates this week.
Annual growth in employees’ average regular earnings rose to 5.2 per cent in the three months to the end of October, up from 4.9 per cent in the same period to September, the Office for National Statistics (ONS) said in a statement.
The ONS added that the unemployment rate stayed at 4.3 per cent to the end of October, which came in line with expectations.
The growth in wages, which had been slowing steadily for over a year, reflected a “stronger growth in private sector pay”, according to ONS director of economic statistics Liz McKeown.
Analysts have maintained expectations that the Bank of England will keep its main interest rate unchanged at its meeting tomorrow, as inflation stands above the BoE’s two per cent target.
“Rising wage inflation is a matter for concern, because there’s a risk it means businesses raise prices to cover wage costs, and inflation becomes embedded in the economy again,” said head of personal finance at Hargreaves Lansdown Sarah Coles.
“Anyone wondering whether we might get another interest rate cut this week can now be fairly confident it’s going to be off the table entirely in December,” she added.
Last month, the central bank trimmed borrowing costs by 25 basis points to 4.75 per cent.
That came after the BoE reduced it key rate in August for the first time since early 2020, from a 16-year high of 5.25 per cent as UK inflation returned to normal levels.
