UK Pay Growth Slows as Job Openings Hit Four-Year Low

UK pay growth has cooled and job openings have hit a four-year low, according to official data. Regular pay, excluding bonuses, rose 3.5% in the three months to July from a year earlier.

However, job vacancies fell to 702,000 in the three months to August, the lowest since 2021. This mix of slower pay growth and reduced job openings hints that employers are losing some pricing power in the labor market.

The Bank of England's focus is on private-sector pay, which slowed to 2.9%. This reduces the case for higher interest rates, as investors now put only about a one-in-three chance on a quarter-point hike at Thursday's meeting.