Wage growth has remained strong, the latest official figures show, as the Bank of England decided to hold interest rates.
Wages – excluding bonuses – grew 5.9% in the three months to January, the same amount as a month earlier, data from the Office for National Statistics (ONS) showed.
Meanwhile, growth in average weekly earnings, including bonuses, fell to a surprise 5.8%. Economists polled by the Reuters news agency anticipated a 5.9% rise.
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It means wage growth is still high and well above the rate of overall price rises. Inflation stood at 3% in January.
Both private and public sectors have seen rises, the ONS said, describing the growth as “strong”.
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It came as the Bank of England held interest rates at 4.5% at its meeting today, in part because of the inflationary impact of wage growth.
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Wage increases have surpassed the level of inflation since July 2023, something that could stop the interest rate setters at the Bank from cutting rates at future meetings.
Unsurprising unemployment
There was little change in the rate of unemployment which remained at 4.4%.
The labour market picture is “relatively unchanged”, the ONS’s director of economic statistics, Liz McKeown said.
The number of employees on payrolls is “broadly flat” with little growth seen over the last year, she added.
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The ONS, however, has advised caution in interpreting changes in the monthly unemployment rate due to questions over the reliability of the figures.
The exact number of unemployed people is not known – partly because people don’t answer the phone when the ONS calls.
Some good news for government
In good news for the government, data also released today showed a fall in the number of people neither in nor looking for work.
Welfare reforms announced this week aim to bring down the number of people classed as “economically inactive“.
But the numbers have already gone down.
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ONS figures showed the economic inactivity rate for people aged 16 to 64 years was around 21.5% in the three months to January, below the same time last year as well as the preceding three months.
