UK Wage Growth Cools, Unemployment Rate Holds Steady

In the period of three months leading up to October, wage growth in the UK has experienced a significant slow down, while the unemployment rate has remained steady. This news comes as the Bank of England prepares for its final meeting of the year.

As per the Office for National Statistics, the unemployment rate for August-October stood at 4.2%, the same as the previous three-month period, in line with the expectations of economists polled by The Wall Street Journal.

The ONS also reported that average annual wage growth, excluding bonuses, eased to 7.3% over the three months, compared to the 7.8% growth seen in July-September. Although this is slightly below economists' expectations of 7.4%, it is important to note that wages are still growing in real terms due to a faster decline in inflation.

During September-November, there were 949,000 vacancies, marking a decline of 45,000 compared to June-August.

The cooling wage growth is likely to alleviate some of the pressure on the Bank of England policymakers, hinting at successful efforts to control inflation within the economy. Consequently, most economists predict that the Bank of England will maintain interest rates at its upcoming meeting on Thursday.

"While the labor market remains tight when considering historical standards, the significant drop in wage growth reinforces the growing belief among market participants that interest rate cuts may occur sooner rather than later," remarked Ashley Webb, a U.K. economist at Capital Economics.