UK wage growth falls as employers cut payrolls, raising rate cut hopes

15th Oct 2024 07:32

(Sharecast News) - UK earnings growth fell to its lowest level for more than two years, in another sign that the jobs market was weakening as businesses cut the number of workers on payrolls, according to data published on Tuesday, raising the expectations of a rate cut from the Bank of England next month.

Average regular earnings growth came in at 4.9% in the three months to August, down from 5.1% in the previous quarter and the lowest since June 2022, the Office for National Statistics said.

Vacancies declined to 34,000 to 841,000 in the quarter to September while workers on UK payrolls also fell by 35,000 between July and August.

However, the unemployment rate declined unexpectedly to 4% in the three months to August, down from 4.1% in the previous quarter, though the ONS warned that a low response to its jobs survey meant the figure should be treated with caution.

"Pay growth slowed again, with last year's one-off payments made to many public sector workers continuing to affect the figures for total pay. However, earnings continue to rise faster than inflation," the ONS said.

Ashley Webb, UK economist at Capital Economics, said: "The further fall in wage growth in August, together with some signs that the labour market continued to loosen gradually, adds further support to widespread expectations that the Bank of England will cut interest rates from 5.00% to 4.75% at the next policy meeting in November."

Reporting by Frank Prenesti for Sharecast.com