UK Wage Growth Cools as Unemployment Rate Holds Steady
In the three months leading up to October, wage growth in the United Kingdom has cooled, while the unemployment rate has remained steady. This news comes as the Bank of England prepares for its final meeting of the year, with economists hoping for encouraging signs.
According to data from the Office for National Statistics (ONS) published on Tuesday, the unemployment rate stayed at 4.2% in the August-October period, which was consistent with the previous three months. This figure was in line with economists’ expectations polled by The Wall Street Journal.
Meanwhile, the ONS reported that average annual wage growth, excluding bonuses, dropped to 7.3% over the three months, down from 7.8% in July-September. Although this figure fell slightly short of economists’ expectations of 7.4%, it is worth noting that wages are still increasing in real terms as inflation continues to decline.
Additionally, the number of job vacancies decreased by 45,000, standing at 949,000 in September-November compared to June-August. These figures indicate that wage pressure may be easing overall, which could be attributed to efforts to alleviate inflation having an impact on the economy.
The cooling wage growth is likely to relieve some of the pressure on the Bank of England’s policymakers. This development suggests that the central bank may hold interest rates steady at its upcoming meeting on Thursday, according to most economists.
However, Ashley Webb, a UK economist at Capital Economics, highlighted that the labor market remains tight compared to historical standards. Webb also noted that the significant decline in wage growth could intensify the belief in markets that interest rate cuts will be implemented sooner rather than later.
As the year draws to a close, the UK’s economic landscape appears to be facing mixed fortunes, with unemployment remaining stable but wage growth showing signs of cooling. The Bank of England’s final meeting of the year will be closely watched by economists and policymakers alike, as they evaluate the potential impact of these developments on the nation’s economy moving forward.
More detail via MarketWatch here… ( Image via MarketWatch )