UK Wage Growth Slows Amid War-Driven Cost of Living Crisis

Wage growth in the UK has slowed down to 4.1% in the three months to June, according to official figures from the Office for National Statistics (ONS). This is a decrease from the 4.4% growth seen in the previous quarter.

The number of workers on company payrolls fell by 13,000 in July, matching the decline in June. Vacancies also hit a five-year low, falling to 707,000 in May to July, down 6,000 compared with the previous three months.

Despite this, unemployment remained unchanged at 4.9%. The ONS director of economic statistics, Liz McKeown, noted that 'regular wage growth has remained broadly stable in recent months,' but pointed out that private sector pay growth has continued to ease, while public sector pay growth remains elevated due to the timing of NHS pay awards.

The slowdown in wages and jobs market could strengthen the case for the Bank of England to hold back from raising interest rates, as economists point out that a weaker labour market could help limit the capacity for stubbornly high inflation becoming entrenched in the economy.