Strong UK wage growth puts pressure on BoE to keep rates high

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UK wage growth remained persistently strong in the three months to March despite a slowing jobs market, giving hawks on the Bank of England’s monetary policy committee fresh grounds to wait for firmer signs of inflationary pressures easing before cutting interest rates.

The Office for National Statistics said annual growth in average weekly wages, including bonuses, remained steady at 5.7 per cent in the three months to March, compared with analysts’ expectation of a slowdown to 5.5 per cent.

Excluding bonuses, average wages were 6 per cent higher than a year earlier over the same period, also unchanged from an upwardly revised estimate for the three months to February and higher than the 5.9 per cent expected.

Strength in earnings came against a backdrop of a softening jobs market in which vacancies continued a long-running decline, payrolled employment was virtually flat and the number of people claiming unemployment benefits edged up.Â

Sterling brushed off the figures remaining flat against the dollar on the day at $1.256.

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