[ad_1]
A weaker than expected easing in the pace of pay rises means real earnings growth, when inflation is taken into account, is at its highest rate in almost two and a half years, according to the latest official figures.
The Office for National Statistics (ONS) said average regular pay, excluding bonuses, stood at 6% in February.
In real terms, when the rate of inflation is reflected, pay growth by the same measure was 2.4% – its highest level since July 2021, the report said.
The base figure was above the 5.8% expected by economists and only down from the 6.1% sum registered the previous month.
There was no shift in the data which included bonuses on a rolling three-month basis.
The figures, while welcome on the face of its for struggling households, will make for worrying reading at the Bank of England which is assessing the timing for a long-awaited interest rate cut amid its battle against inflation.
It has wanted to see the pace of wage growth ease for fear that high earnings risk stoking demand, and therefore prices, across the economy.
The wider ONS figures showed a rise in the UK’s unemployment rate to 4.2% from 3.9% though the statistics body continued to place a big health warning on the number due to continuing work on making the employment data more reliable.
ONS director of economic statistics, Liz McKeown, said: “Recent trends of falling vacancy numbers and slowing earnings growth have continued this month albeit at a reduced pace.
“But with the rate of inflation also slowing, real earnings growth has increased and is now at its highest rate in nearly two and a half years.
“At the same time, we are now seeing tentative signs that the jobs market is beginning to cool, with both a fall in the headline employment rate from our survey and a drop in the total number of people on payrolls from HMRC data.”
The Bank’s medicine of interest rate hikes since December 2021 to counter inflation have inflicted higher borrowing costs on businesses…
[ad_2]
