UK wage growth accelerates, unemployment rate unchanged
By Michele Maatouk
Date: Tuesday 18 Feb 2025
(Sharecast News) - UK pay growth accelerated in the three months to December, while the unemployment rate was steady, according to figures released on Tuesday by the Office for National Statistics.
The unemployment rate was unchanged at 4.4%, versus expectations for it tick up to 4.5%.
The data also showed that average earnings including bonuses rose by 6% on the year, up from 5.5% in November. Excluding bonuses, wages grew 5.9% - the fastest rate in eight months - up from 5.6%.
Liz McKeown, director of economic statistics at the ONS said, said: "Growth in pay, excluding bonuses, rose for a third consecutive time, with increases in both the private and public sector."
The figures also revealed an estimated 819,000 vacancies in November 2024 to January 2025, down by 9,000 from August to October 2024.
Adam Deasy, economist at PwC, said: "The labour market continues to cool. Vacancies have fallen again, marking the 31st consecutive quarterly decline, and the unemployment rate is steady at 4.4%. Movements are slight, but the demand for workers is softening.
"Pay growth remains elevated, with annual growth of regular pay at 5.9%, the fastest level in eight months. While wage growth still appears sticky, more recent survey data suggests employers are tightening their purse strings as the impact of the Government's tax hikes in the Autumn Budget take hold. This raises the possibility of a slowdown in pay settlements further down the line.
"After a 25bps cut earlier this month, Bank of England Governor Andrew Bailey has reiterated that monetary policy will be loosened 'gradually and carefully.' The latest data are unlikely to shift that stance, reinforcing expectations that rate cuts will come - it's just a matter of timing."
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