Annual wages grew 7.3 per cent in the three months to the end of October, a slight fall on the month before and a figure which will give the Bank of England more freedom to hold interest rates later this week.
The readout is slightly lower than consensus of 7.4 per cent and some way down on the 7.7 per cent growth seen the month before.
Inflation sits at 4.7 per cent. The Office for National Statistics reckons real pay growth is averaging just above 1 per cent.
The figures set the scene for the Bank of England’s last call on interest rates of the year, to be announced Thursday.
The Bank has hit pause after a breakneck period in which the interest rate was hiked 14 times in a row.
Most analysts expect the Bank of England to hold rates this week, with members of the monetary policy committee in wait and see mode.
Some believe the Bank’s interest rate hikes have not filtered through into the wider economy yet, and the impacts need to be felt before any further action to strangle money supply.
In its Financial Stability Report published last week, Threadneedle Street’s Financial Policy Committee said higher interest rates continue to put some firms and households “under pressure” but UK corporates in particular were expected to remain “broadly resilient to higher interest rates and weak growth”.
“In aggregate, UK corporates’ ability to service their debts has improved due to strong earnings growth,” the Financial Policy Committee said.
“But the full impact of higher financing costs has not yet passed through to all corporate borrowers and will be felt unevenly, with some smaller or highly leveraged UK firms likely to remain under pressure,” the report continued.
Jack Kennedy, Senior Economist at the global hiring and matching platform, Indeed, commented: “The labour market continues to gradually cool. Vacancies fell for a seventeenth consecutive period in the three months to November and are now down 27% from their peak, though remain above pre-pandemic levels. The unemployment rate was stable at a still fairly low 4.2%, while employment and inactivity were also unchanged, albeit these estimates continue to have only ‘experimental’ status. Hiring conditions are likely to continue to gradually ease in 2024 as the labour market rebalancing proceeds.
“The latest figures showed regular pay growth easing but it remains very high at 7.3% year-on-year. Wage growth remains one of the key metrics for Bank of England rate setters and how persistent it proves into 2024 will be a key determinant for the timing of any monetary policy easing.