Stay informed with free updates
Simply sign up to the UK employment myFT Digest — delivered directly to your inbox.
UK wage growth eased in the three months to March as employers held off hiring ahead of steep increases in payroll taxes and the minimum wage.
Annual growth in average weekly wages was 5.6 per cent, excluding bonuses, in the three months to March, the Office for National Statistics said on Tuesday. The figure was in line with analysts’ expectations and down from 5.9 per cent in the three months to February.
Separate figures showed payroll employment fell by 47,000 or 0.2 per cent between February and March, leaving the number of employees in the January to March period flat compared with a year earlier. Preliminary figures for April showed a further drop of 33,000 or 0.1 per cent on the month, as employers sought ways to manage the increase in labour costs.
Victoria Clarke, UK chief economist at Santander, said ahead of the data release that the figures were likely to support the Bank of England’s view “that a gradual easing path is the right one”.
The central bank cut interest rates by 0.25 percentage points to 4.25 per cent last week but its Monetary Policy Committee was split three ways, with two members favouring a bigger 0.5 percentage point cut and 2 others voting to leave interest rates unchanged.
Two MPC members warned on Monday against rushing to cut interest rates again, stressing the need to see more evidence that inflationary pressures were easing.
Clare Lombardelli, a BoE deputy governor, said that wage growth was “still too high” to be consistent with the BoE’s inflation target, even though it looked likely to fall by year end.
