UK Pay Growth Slows as Jobs Market Stalls

Wage growth has slowed and the UK jobs market is showing signs of stalling, according to latest official figures.

Pay growth, excluding bonuses, eased to 7.3% in the three months to October while the number of vacancies dropped.

But while earnings are not rising as quickly as before, they are still outpacing inflation – which measures the rate at which prices are going up.

This suggests that the Bank of England is less likely to cut interest rates anytime soon.

The number of people on payrolls eased while UK job vacancies also continued to fall, this time by 45,000 between September and November.

Darren Morgan, director of economic statistics at the Office for National Statistics, which published the figures said it is the longest period of decline on record, longer than in the immediate aftermath of the 2008 downturn.

It is the 17th month in a row that the number has fallen.

However, overall vacancies totalled 949,000, which Mr Morgan said “remains well above pre-pandemic levels”.

Inflation has been falling following a long run of interest rate rises by the Bank of England.

This has prompted financial markets and some economists to suggest the Bank may soon start cutting interest rates from the current level of 5.25%.

But while inflation has eased to 4.6%, it remains more than double the Bank’s target of 2%.

In addition, regular pay grew faster than inflation in the three months to October.

Last month, the Bank of England’s governor Andrew Bailey said it was “much too early to be thinking about rate cuts”.

The Bank is widely expected to hold interest rates for a third time in a row when it announces its latest decision on Thursday.