UK Pay Growth Slows Amid Record Employment
July 17 2018 - 5:28AM
RTTF2
Britain's employment level set a fresh record in the three
months to May and unemployment was unchanged, yet pay growth eased
to its lowest in six months, figures from the Office for National
Statistics showed Tuesday.
The number of employment was a record high 32.399 million in the
March to May period, rising by 137,000 from the previous three
months. Economists had forecast employment growth of 115,000.
The employment rate rose to a record 75.7 percent from 75.6
percent in the three months to April period.
The unemployment rate remained at 4.2 percent, which was the
joint lowest since 1975. The figure matched economists'
expectations.
Average weekly earnings including bonus, or total pay, grew 2.5
percent year-on-year in the three months to May, which was slower
than the 2.6 percent in the previous three months.
Pay growth was in line with economists' predictions and was the
weakest since the three months to November, when earnings rose at
the same pace.
Excluding bonus, average weekly earnings increased 2.7 percent,
a tad slower than the 2.8 percent rise in the previous three-month
period, but matched economists' expectations.
ING Bank economist James Smith expects the Bank of England to
hike the interest rate in August and hold it unchanged until May
next year.
"Despite a slip in UK wage growth, we suspect the Bank of
England will remain comfortable with the overall trend," Smith
said.
"If Brexit uncertainty picks up as time starts to run out, we
think the Bank could have a tricky time hiking rates later this
year," the economist added.
A no-deal Brexit would be a "material event" for interest rates
as it would have "big economic consequences" for the UK, Bank of
England Governor Mark Carney said at a parliamentary hearing on
Tuesday.
In its latest macroeconomic projections, the International
Monetary Fund lowered the UK growth forecast for this year to 1.4
percent from 1.6 percent. The lender sees growth at 1.5 percent
next year.
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