Pay Growth Decline in Great Britain May Lead to Interest Rate Cuts
Pay growth in Great Britain has fallen below five percent for the first time in over two years, prompting increased likelihood of interest rate cuts by the Bank of England. Wage growth, excluding bonuses, was four point nine percent in the three months to August 2023. Youth unemployment is a concern, rising to twelve point eight percent, while economic growth remains flat, adding pressure for further rate cuts.
Annual wage growth in Great Britain has fallen below 5% for the first time in over two years, increasing the likelihood of an interest rate cut by the Bank of England.
According to the Office for National Statistics, wages excluding bonuses rose by 4.9% in the three months to August, a decrease from 5.1% in the prior quarter.
Including bonuses, the growth was 3.8%, down from 4.1% in July.
The dip in wage increases, partly due to the absence of last year's bonuses for NHS and civil service staff, points to a normalization of earnings growth.
Despite this, youth unemployment rose to 12.8%, sparking concerns.
Bank of England is under pressure to reduce rates further to counteract a flat economic growth in Q3 and potential tax rises in the upcoming budget.
The labor market shows signs of weakness, with vacancies falling and an unemployment rate at 4%.
The TUC has highlighted growing long-term youth unemployment as a pressing issue, while Work and Pensions Secretary Liz Kendall outlines plans to improve employment support.
According to the Office for National Statistics, wages excluding bonuses rose by 4.9% in the three months to August, a decrease from 5.1% in the prior quarter.
Including bonuses, the growth was 3.8%, down from 4.1% in July.
The dip in wage increases, partly due to the absence of last year's bonuses for NHS and civil service staff, points to a normalization of earnings growth.
Despite this, youth unemployment rose to 12.8%, sparking concerns.
Bank of England is under pressure to reduce rates further to counteract a flat economic growth in Q3 and potential tax rises in the upcoming budget.
The labor market shows signs of weakness, with vacancies falling and an unemployment rate at 4%.
The TUC has highlighted growing long-term youth unemployment as a pressing issue, while Work and Pensions Secretary Liz Kendall outlines plans to improve employment support.
