Wages across the U.K. grew at their slowest pace in over two years in the three months through June, in the latest sign that one of the biggest local drivers of inflation is easing.
Average wages including bonuses rose by 4.5 percent from a year earlier, according to data published today by the Office for National Statistics. That was down from 5.7 percent in the three months through May.
Coupled with another sharp rise in the number of those claiming unemployment benefits in July, the numbers add to evidence of a cooling labor market in Britain and may make it easier for the Bank of England to continue cutting interest rates.
The slowdown in pay growth wasn’t as sharp as the headlines suggested, as the comparative number from a year ago was inflated by a large one-off payment to National Health Service workers, the ONS said. Excluding bonuses, regular pay grew by 5.4 percent, but that was still the slowest since July 2022.
Elsewhere, the ONS said the claimant count had risen by 135,000 in July, the biggest monthly rise in four years, while the number of vacancies — a measure of demand for labor — fell another 26,000. Vacancies have fallen every month for over two years now. However, the unemployment rate actually fell to 4.2 percent of the workforce, as more people entered or reentered the workforce. Overall employment in the three months through June rose by 97,000, its biggest rise in a year.
