The growth in the average wages of British workers, under the watchful eye of the Bank of England, has decelerated from its previous record level. Aside from that, the number of job vacancies has dwindled, as per official data. These indicators collectively suggest a loss of momentum in the labor market.
Average earnings in the United Kingdom, excluding bonuses, showed a 7.8% increase over the three months ending in August, in comparison to the previous year. This figure is slightly lower than the 7.9% growth reported in the previous three-month period ending in July. This marks the first decline in this metric since January.
The Bank of England is keeping a close eye on the average wages as it contemplates potential interest rate hikes to combat persistently high inflation.
The obtained figures were consistent with the expectations of economists surveyed by Reuters. Nonetheless, after the data's release, the British pound experienced a slight dip against the US dollar.
When considering the total pay, including bonuses, they registered an 8.1% increase over the previous year in the three months leading to August. However, given the consumer price inflation rate of 6.7% in August, the real wage growth was notably lower.
In terms of inflation-adjusted Consumer Price Index (CPI) growth in regular wages, it amounted to a mere 0.7% during the three months up to August.
The Chief Economist of the Bank of England and Executive Director for Monetary Analysis and Research, Huw Pill, pointed out that the rapid surge in nominal wages contradicted other labor market indicators, which evidence a slowdown in the economy.
In the three months leading to September, the number of job openings dropped slightly from 998,000 to 988,000 in comparison to the preceding three months up to August.
Early figures from employer payroll data indicated a drop of 11,000 in employment for September when compared to August.
That being said, comprehensive unemployment data and various other labor market indicators will not be available until after October 24. The Office for National Statistics (ONS) has mentioned the need for additional time to process responses.
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