MNI BRIEF: UK Earnings Slow, But Remain At Elevated Levels

UK average earnings slowed more than expected in the three months to October, offering some signs to Bank of England policymakers that the labour market is cooling, albeit from an elevated level, data released by the Office for National Statistics showed Tuesday.

Annual growth in regular pay (ex-bonuses) in Great Britain was 7.3% in the period to October, while growth in employees' average total pay (including bonuses) was 7.2%. Annual average regular earnings growth for the public sector was 6.9% in August to October 2023, and is among the highest regular annual growth rates since comparable records began in 2001. Annual average regular earnings growth for the private sector was 7.3%.

In September to November 2023, the estimated number of vacancies in the UK fell by 45,000 on the quarter to 949,000. Vacancies fell on the quarter for the 17th consecutive period, the longest consecutive run of quarterly falls ever recorded but the total still sits above pre-coronavirus (COVID-19) pandemic levels.

Elevated earnings growth will still unnerve many at the Bank, but at least they will see the data is moving in the right direction and is below their November forecasts. However, it is unlikley to be a gamechanged in voting intentions of individual MPC members.