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UK wage growth slowest since Feb even as unemployment falls again
[LONDON] Wage growth in Britain in the three months to November was its slowest since February, official data showed on Wednesday, the latest sign the Bank of England will take its time before raising interest rates.
The slowing in wage growth came even as Britain's unemployment rate unexpectedly fell to 5.1 per cent, its lowest since early 2006, from 5.2 per cent in the three months to October.
The BoE is keeping a close eye on wage growth as it considers when to raise interest rates at a time when inflation has hovered near zero for months and weakness in the global economy is hurting British output.
months to November, compared with a forecast of 2.1 per cent in the Reuters poll. Earnings after bonus were 1.9 per cent higher versus a 1.8 per cent forecast.
In the month of November alone, total wages in the private sector, which are monitored closely by the BoE, rose by 2.2 per cent, compared with 2.1 per cent in October.
BoE Governor Mark Carney said on Tuesday the BoE was looking for a pick up in underlying price pressures - chiefly wage growth - as well as above-trend economic growth and core inflation moving towards the inflation target before considering a rate hike.
Carney has previously said he would like to see earnings growth moving above 3 per cent a year before moving towards supporting a rate increase.
The ONS said the number of people in employment leapt by 267,000, its third biggest increase since records began in 1971, taking the employment rate to an new high of 74.0 per cent.
Carney also said on Tuesday that the unemployment rate at which wages start to push up inflation could be lower than previously thought.
The comments reinforced the view that the BoE will not hike borrowing costs until at least the second half of this year.