Wage growth in the UK slowed in July, with average total earnings, including bonuses, easing to 3.9% in the three months to July. This figure is down from 4.1% in the three months to June, matching forecasts from City economists, according to the Office for National Statistics (ONS).
The ONS also reported a continued decline in the number of workers on company payrolls, particularly in the retail and hospitality sectors. Liz McKeown, ONS director of economic statistics, noted that vacancies are at their lowest level outside the pandemic period for over a decade, with smaller businesses citing increased labour costs as a factor affecting hiring decisions.
This slowdown in wage growth comes as the Bank of England prepares for a meeting on Thursday to consider its response to rising global energy prices. City investors largely expect the Bank to maintain the base rate at its current level of 3.75%, though some see an outside chance of a quarter-point increase.
Official figures expected on Wednesday are anticipated to show that the headline rate of UK inflation rose above 3% in August. The Bank of England targets 2% inflation.