Basic pay in Britain grew more quickly again in the last three months of 2022, underscoring the Bank of England’s worries about inflationary heat in the economy, but other data published on Tuesday suggested a cooling in the labour market.
Despite being on the brink of recession, Britain’s jobless rate held close to five-decade lows and employment grew.
Pay excluding bonuses rose by 6.7%, its fastest growth since records began in 2001 apart from during the coronavirus pandemic when changes in incomes were distorted by furloughs of workers.
Total pay grew by an annual 5.9% in the October-to-December period, the slowest rise since the three months to July last year, but that largely reflected unusually high growth in bonuses in late 2021, the Office for National Statistics said.
Economists polled by Reuters had expected the ex-bonuses measure to increase by 6.5% and total pay to rise by 6.2%.
The pace of pay growth in Britain is being monitored by the BoE as it gauges how much higher to raise interest rates, having increased borrowing costs 10 times in a row since December 2021. It has signalled that run might be close to an end.
Sterling rose against the U.S. dollar and the euro immediately after the data before easing back. Investors increased slightly their bets on the BoE raising interest rates by another quarter of a percentage point in March.