Wage growth for UK employees remains strong, potentially lowering the prospect of a pre-election cut in interest rates.
In the year to February to April 2024, pay grew by an average of 6.0% excluding bonuses, or 5.9% including bonuses, according to the latest employment data from the Office for National Statistics (ONS). Both measures were unchanged from the previous three-month period.
The National Living Wage went up by 9.8% in April, contributing to overall pay growth.
Earnings are still increasing faster than inflation, which currently stands at 2.3%.
Taking inflation into account, regular pay grew by 2.9% — the highest since June to August 2021.
The monthly data also showed a rise in the unemployment rate from 4.3% to 4.4%, the highest since September 2021. And there was another increase in the inactivity rate, with 22.3% of working age people deemed not to be actively looking for work.
The number of job vacancies was estimated at 904,000, down on the quarter for the 23rd consecutive period but still above pre-pandemic levels.
“This month’s figures continue to show signs that the labour market may be cooling, with the number of vacancies still falling and unemployment rising, though earnings growth remains relatively strong,” the ONS said.
The data will be studied by the Bank of England as it considers the timing of its first interest rate cut since the start of the pandemic.
Most analysts expect rates to be held at 5.25% at the next meeting of the Monetary Policy Committee on 20 June, followed by a cut in August or September.
