Pace of wage growth eases back from record levels
The pace of wage growth has eased back by more than expected, according to official figures that will please interest rate-setters at the Bank of England.
The Office for National Statistics (ONS) reported basic pay was 7.3% higher in the three months to October compared to the same period last year.
That was down from an upwardly revised level of 7.8% reported last month.
When the effects of bonuses were added, the drop was from 8% to 7.2%.
The wider ONS figures showed unemployment remained unchanged at 4.2% over the same three month period.
The latest data was released against a backdrop of resistance from Bank of England rate-setters to the idea it could soon start to cut interest rates to help inject growth into the country's flatlining economy.
It argues inflation remains too high, at 4.6%, despite the slowdown from its peak above 11%.
Financial markets have, in recent weeks, adjusted expectations for a rate cut to the second half of 2024.
The Bank will want to see the pace of wage growth ease back substantially to help tackle the pace of price increases.
It is worried higher levels of pay will only fan the flames of inflation by stoking demand in the economy.
To that end, a report by the Resolution Foundation released earlier on Tuesday suggested the projected easing in inflation would drive smaller wage increases in 2024.
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It added falling job vacancy rates would also help.
The Bank's latest thinking will be revealed on Thursday when the monetary policy committee makes its latest interest rate decision.
It is widely tipped to hold Bank rate at 5.25% for the third consecutive meeting, meaning there is no prospect of an immediate and meaningful fall in borrowing costs being passed on by lenders.
But the minutes, and voting, will be closely scrutinised for any evidence of a softening towards rate cuts.
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