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UK wages rise ahead of forecasts

Wage growth outstripping inflation while jobless rate ticks up poses dilemma for the Bank of England.

14 May 2024

Wages excluding bonuses over the last three months in the UK came in slightly more than forecast this morning, showing pay rising 6% in the quarter compared to this time last year. Unemployment rose by 166k in the quarter to 4.3%, the third consecutive monthly rise. So, mixed signals for the Bank of England to digest ahead of any planned rate cutting in June – on the one hand restrictive policy is starting to affect the jobs market, even if pay growth, which in essence is inflationary, remains strong. The main focus will be on the inflation data next week – if it manages to fall as expected towards 2% then one should expect that these earnings and unemployment figures will be given lesser weight in their decision making.

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Charles Hepworth

Investment Director
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