UK wage growth strengthens
By Michele Maatouk
Date: Tuesday 13 Jun 2023
(Sharecast News) - The UK unemployment rate was a touch lower than expected in three months to April, while wage growth strengthened, according to figures released on Tuesday by the Office for National Statistics, putting pressure on the Bank of England to keep raising interest rates.
Regular pay excluding bonuses grew 7.2% in February to April, up from 6.8% in the previous three months and ahead of expectations for 6.9% growth. This marked the largest growth rate seen outside of the Covid pandemic.
Average total pay including bonuses grew 6.5% in the quarter, up from 6.1% in the previous three months and versus expectations it would be unchanged.
Meanwhile, the unemployment rate came in at 3.8%, up from 3.7% in the previous quarter but down on the 3.9% reported a month earlier and below expectations of 4.0%.
ONS director of economic statistics Darren Morgan said: "With another rise in employment, the number of people in work overall has gone past its pre-pandemic level for the first time, setting a new record high, as have total hours worked.
"The biggest driver in recent jobs growth, meanwhile, is health and social care, followed by hospitality.
"While there has been another drop in the number of people neither working nor looking for work, which is now falling right across the age range, those outside the jobs market due to long-term sickness continues to rise, to a new record."
ING economist James Smith said: "Faster-than-expected wage growth points to a rate hike in June and potentially August, and is a reminder that pay pressures are likely to ease only gradually.
"That doesn't necessarily suggest the Bank of England needs to raise rates as aggressively as markets expect, but it does imply that rate cuts are some way off."
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