UK Wage Growth Stalls

The Office for National Statistics (ONS) showed today, the UK’s average weekly earnings, excluding bonuses matched expectations, arriving at 2.8% 3m y/y versus 2.6% last while the gauge including bonuses steadied at 2.8% 3m y/y versus 3.0% expected.

The official jobless rate ticked lower to 4.2% in February, while the claimant count change increased more-than-expected.

The number of people claiming jobless benefits rose by 11.6k in March, against expectations of a 5.0k increase and +15.1k (revised from +9.2k) seen previously. The claimant count rate was unchanged at 2.4%.

Despite the mixed data, the pound is at a Brexit high against the Euro and the US Dollar.

The Bank of England has said it expects the fall in unemployment to start pushing up pay more quickly, the main reason why it has said it is likely to raise interest rates more quickly than it previously thought.

British households – whose spending is the main driver of the country’s economy – have been struggling from the double whammy of slow wage growth and a jump in inflation, due mostly to the fall in the value of the pound after the 2016 Brexit vote.

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