The pace of wage growth has eased back from a record level, according to official figures that showed a resilient labour market despite the stalling economy.
The Office for National Statistics (ONS) reported average wages excluding bonuses were 7.7% higher than a year earlier in the three months to September.
That was down from the revised 7.9% level registered last month but meant wages were still rising by 1% after taking the rate of inflation into account.
The ONS said it was the highest rate for real wage growth for two years though economists declared the data was a clear sign that wage growth is slowing – raising the chance of an earlier than expected interest rate cut by the Bank of England next year.
The easing in the headline wage figure, while slight, will be welcomed by rate-setters who see high pay growth as an inflationary threat.
That is because improved spending power tends to boost demand, and therefore price growth.
The Bank has twice held off on a further interest rate rise since September due to evidence its 14 consecutive hikes, aimed at taming the pace of price increases, is having the desired effect.
The employment data, though, is complicated by the fact it currently comes with a big health warning.
The ONS is working hard to bolster participation rates for its Labour Force Survey, which is the backbone of the employment figures.
Falling response volumes have knocked the perceived accuracy of the estimates.
The ONS has responded with a series of measures including the return of in-home interviews and recontacting households that fail to respond.
The problems mean for a second successive month, the report is incomplete.
It is a crucial tool for providing an overview of the UK labour market and forms a big part of decision making at the Bank of England when deciding interest rate levels.
The decline in the wage figure was mainly explained by one-off payments to NHS staff, made in June, falling out of the calculations.
At 7.7%, it…
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This notice was published: 2023-11-14 06:33:00
Sky News is a British 24-hour information television channel, the first in Europe of its kind, launched on February 5, 1989 by the British Sky Broadcasting Company.