(Reuters) – Wage growth in the United Kingdom surprised upwards in the three months to the end of March, according to figures published on Tuesday by the Office for National Statistics, which nevertheless showed that tensions in the labor markets employment dissipates.
Wages excluding bonuses increased by 6.0% in the three months to the end of March compared to the same period the previous year, a figure identical to that of the period from December to February.
Economists polled by Reuters expected growth of 5.9%.
Growth in total compensation, including bonuses which vary more, stood at 5.7%, compared to 5.5% expected by the consensus and 5.7% (revised from 5.6%) during the previous period.
The Bank of England (BoE) will not be concerned about wage data in line with its own estimates, especially as Tuesday’s figures show that employment pressures are dissipating, says Rob Wood, chief economist for the Bank of England (BoE). United Kingdom at Pantheon Macroeconomics.
“Labour markets continue to weaken gradually, and the BoE will be able to rely on the latest data to propose a rate cut in June,” he adds.
Unemployment increased to 4.3%, the highest since July 2023, while vacancies fell for the 22nd consecutive time, down by 26,000 positions since the previous period.
Other analysts believe, conversely, that the latest data could argue for restrictive rates for longer.
“Wage growth was higher than consensus, even if other indicators suggest a more pronounced weakening of labor markets,” notes Jack Kennedy, economist at Indeed, the job offers platform.
“This calls into question a rate cut in June, and could push monetary policy makers to want to wait for more data.”
The Conservative government has welcomed the latest data, as polls give Labor a wide lead in national elections due this year.
“Wages have been above inflation for the tenth consecutive month, which will ease cost of living pressures on families,” Finance Minister Jeremy Hunt said in a statement.
(Reporting Suban Abdulla, French version Corentin Chappron, editing by Kate Entringer)
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