Wage growth in the UK slows slightly

In comparison to a year prior, average earnings before bonuses increased 7.8% in the three months to August, which was less than the upwardly revised 7.9% gain in the previous month. The growth rate was predicted by economists to stay the same at 7.8%.

The three months leading up to July saw the strongest growth since statistics were kept in 2001.

In contrast to consensus projections of 8.3%, total profits including incentives increased by 8.1% from 8.5%.

Pantheon Macroeconomics chief UK economist, Samuel Tombs, stated that the MPC should retain the bank rate at 5.25% again next month due to indications that wage growth is slowing.

"Average weekly earnings excluding bonuses increased by 0.34% month over month in August, or 4.2% on an annualised basis, well below the average increase of 0.66% in the first seven months of 2023," he concluded. “The MPC cannot continue to tolerate August's rate of rise indefinitely, and it may be revised upward as has been typical recently. However, improvements in labour market slack, which is still increasing, lag wages.”

(Sources: investing.com, sharecast.co.uk)