LONDON – Britain’s core wage growth slowed again, posting its weakest growth since the three months to September 2022, but remained strong by historical standards, according to official figures that are likely to receive a cautious welcome from the Bank of England.
Regular wages excluding bonuses grew by 6.0% in the three months to February compared with the same period a year earlier, down from a 6.1% increase in the November to January period, the Office for National Statistics said.
A Reuters poll of economists had forecast growth in regular wages – which is in the BoE’s view as it considers when to start cutting interest rates – to slow further to 5.8%.
“The labor market continues to cool gradually, but continued high wage growth underscores concerns about inflation persistence,” said Jack Kennedy, senior economist at jobs platform Indeed.
“With stubborn US inflation dampening hopes of an imminent Fed rate cut, prospects for UK rate cuts before autumn also look doubtful.”
Sterling fell slightly against the US dollar and euro immediately after the data was released, and investors cut their bets on BoE rates this year.
Growth in total pay, which includes more volatile bonuses, was unchanged at 5.6%. The Reuters poll showed a slight slowdown to 5.5%.
The unemployment rate rose more than expected to 4.2% from 3.9%, although the ONS said there was still some volatility in its data as it revises its survey that produces that figure.
Vacancies fell for the 21st time in a row in the three months to March, fell by 13,000 from the October to December period and fell by 204,000 on a year earlier at 916,000 but remained 120,000 above their pre-COVID level.