Wage growth in the UK is maintained stable by 5.9 %

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Wage growth in the UK remained strong in three months until January against the background of slow employment, according to official data that economists say will strengthen the Bank of England’s case to keep interest rates today.

Annual growth in average weekly earnings, with the exception of bonuses, held at 5.9 % in three months to January, the National Statistics Office said Thursday. The figure was in line with economists’ expectations.

Including bonuses, wage growth in the period decreased slightly to 5.8 %, from 6.1 % in three months to December.

Special figures based on tax records have shown that salaries are flat, with a marginal increase to 9,000 employees between December and January, as companies are concerned about slow economic growth, the threat of trade wars and the forthcoming tax increases and minimum wages.

Employment increased by only 0.1 % during the year by January. But temporary figures for February showed some signs of confidence returning, with an increase of 21,000, or 0.1 % in the month. The initial assessment of the last month has often been revised in the past.

The combination of strong wage growth and slower employment is a challenge for the BOE monetary policy committee, which is expected to keep interest rates at 4.5 % when it announced its decision later on Thursday.

“With the cooling of the labor market, instead of the growth of wages stuck in the range of 5.5-6.0%, we suspect that the Bank of England will lower interest rates by 4.50% today,” Ruth Gregory said, a consulting capital economy. But she added: “All this leaves the bank in an awkward position.”

The MOC is worried that the job market could deteriorate further, but it also became more pessimistic about the rate at which the UK economy could rise without preventing prices. Inflation stood at 3 % in January, and should rise higher by mid -year.

Andrew Bailey, Boj Governor, said last month there is a risk that raising budget taxes could raise prices and hit jobs more than Boe initially expected, as employers in some sectors could not cut staff salary already at the minimum wage.