UK wages, excluding bonuses, surged unexpectedly by 6.0% in the first quarter of 2024 compared to the previous month, according to the latest data. This surpasses the anticipated 5.9% growth projected by economists surveyed by Reuters.
The Bank of England is closely monitoring any indications that sustained wage growth might trigger higher inflation. Just last week, the bank hinted at the possibility of a rate cut from the current 16-year high of 5.25% as soon as June.
Published on Tuesday, this data marks the initial of two labor market reports from the Office for National Statistics (ONS) that will be assessed by the Bank of England ahead of its upcoming meeting.
Treasury Secretary Jeremy Hunt emphasized the continued trend of wages outpacing inflation for the tenth consecutive month, thereby alleviating the financial strain on households. “This is the 10th month in a row that wages have risen faster than inflation which will help with the cost of living pressures on families,” noted Hunt.
Total wages, including bonuses, surged by 5.7%, surpassing economists' expectations by 5.5%. However, regular wages in the private sector experienced a slight decline from 6.0% to 5.9% in the preceding three months.
Despite the consistency in wage growth, recent data indicated a cooling off in the UK labor market.
The unemployment rate climbed to 4.3%, marking the highest level in the three months leading up to July 2023, albeit with a cautionary note about potential revisions to the survey's methodology.
Liz McKeown, Director of Public Policy Analysis at the Office of National Statistics, mentioned that they were observing initial indications of a slowdown in the labor market, evident in both employment figures and the count of workers on the payroll.
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