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MNI BRIEF: Soaring UK Wages An Inflation Concern For BOE

(MNI) London

UK wages rose sharply in the three months to June, again highlighting the dangers the Bank of England faces to drive inflation and inflation expectations lower in coming months.

According to the Office for National Statistics, annual growth in regular pay (excluding bonuses) was 7.8% in April to June 2023, the highest regular annual growth rate since comparable records began in 2001. (MNI INTERVIEW: BOE Likely To Revise Up View Of Wage Growth)

Annual growth in employees’ average total pay (including bonuses) was 8.2%; boosted by the NHS one-off bonus payments made in June 2023. In real terms (adjusted for inflation using CPI), annual growth for total and regular pay fell on the year, by 0.2% for total pay, and by 0.6% for regular pay, all above both City and BOE expectations.

The unemployment rate for April to June 2023 increased by 0.3 percentage points on the quarter to 4.2%. The increase in unemployment was driven by people unemployed for up to 6 months.

The economic inactivity rate decreased by 0.1 percentage points on the quarter, to 20.9% in April to June 2023. The decrease in economic inactivity during the latest quarter was largely driven by those inactive because they are looking after family or home. Meanwhile, those inactive because of long-term sickness increased to a record high. (MNI INTERVIEW: UK's Inactive Population Steadies At High Level)

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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