By Unemployment in the U.K. remained stable in the three months leading up to November, while average pay growth saw a significant decline. These trends indicate that inflation will continue to ease in the coming year.
Unemployment Rate
The rate of joblessness held steady at 4.2% during this period, as reported by the Office for National Statistics (ONS). This figure aligns with the expectations of economists surveyed by The Wall Street Journal.
Average Pay Growth
However, average pay growth, excluding bonuses, experienced a notable deceleration. It increased by 6.6% compared to the revised figure of 7.2% for the previous three months (October). This slowdown in wage growth is unparalleled since the start of the pandemic. It is also slightly more pronounced than economists anticipated.
Impact on Inflation
The diminishing wage growth provides further assurance to the Bank of England that consumer price inflation will not surge again this year. With inflation now closer to the bank’s target level, economists predict that the central bank may implement interest-rate cuts later this year, unless there is an unforeseen inflationary spike.
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