Wage growth slows in boost to hope for interest rate cut

The pace of wage rises has slowed and came in lower than expected, official figures show.

Both average weekly earnings and wages excluding bonuses came in lower than expected, a boost to interest rate setters at the Bank of England, potentially opening the door for steeper borrowing cost deductions.

There was no change at all in the pace of average weekly earnings, which continued to rise 5.6%, according to data from the Office for National Statistics (ONS) for the three months to February.

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Wages excluding bonuses continued to grow far above the rate of inflation at 5.9%, the ONS said, but below forecast.

Economists polled by the Reuters news agency had expected average weekly earnings to rise 5.7% and for wages excluding bonuses to top 6%.

The wage data does not capture the national minimum wage rise, which came into effect on 1 April.

The figures are likely to be a boost to the Bank of England, which had been concerned about the inflationary impact of speedily rising wages.

The unemployment rate remained unchanged at 4.4%.

The ONS, however, has advised caution in interpreting changes in the monthly unemployment rate due to concerns over the figures’ reliability.

The exact number of unemployed people is unknown, partly because people don’t answer the phone when the ONS calls.

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