Wage growth eases while numbers in payrolled employment fall back

Payroll employment drops as wage growth eases.

The Bank of England is closely watching the pace of wage growth at the basic wage, which has eased for the first time since January.

As per the data released by ONS, during the three months to August, compared to last year, the average basic growth increased by 7.8%, which was slightly lower than the 7.9% revised rate from last month.

Although separate figures regarding average weekly earnings, including bonus payments, revealed a significant decline from 8.5% to 8.1%, it is thought that the awards paid in June impacted the public sector.

Such data is encouraging and welcomed by the Bank of England, as it does not need to increase the rate of inflation further, which is currently at 6.7%.

However, concerns regarding the increase in the basic wage will drive the spending power of households, prompting an increase in the prices of goods due to increased demand.

As per last month’s data, the rate of wage growth exceeded inflation for the first time in 18 months.

However, the Bank’s monetary policy committee (MPC) refrained from increasing the rate of interest for the 15th time in a row due to other factors.

The Bank might consider increasing the interest rate by another 0.25% in November if inflation continues to rise again. The figures for September are to be released on Wednesday.

Data released by the ONS has encouraged the rate rise in November to decline.

According to the Refinitiv survey, 77% have the opinion that the MPC will not increase the interest rate, which will be announced on November 2. Before releasing the data, the figures were almost 70%.

As per ONS data, payroll employment dropped by 11,000 in August. The number of job openings in the three months to September dropped to 988,000 from 998,000 in the three months to August.

Due to low response rates, ONS will publish unemployment figures and other labor-related data next week.

- Published By Team Timeswire

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