MNI DATA ANALYSIS: UK Q3 Wages Accelerate; Productivity Slumps>

-UK July-Sept Regular Earnings +3.2%; highest since Q4 2008

-UK July-Sept Real Regular Earnings +0.9%; highest since Q4 2016

-UK Q3 Flash Productivity -0.4% q/q vs +0.5% q/q in Q2

-UK July-Sept LFS Unemployment Rate 4.1% vs 4.0% June-Aug

-UK July-Sept Employment +23,000; Employment rate steady at 75.5% 

By Laurie Laird, Jamie Satchithanantham and Jai Lakhani

     London (MNI) - UK earnings growth accelerated to a near-10-year 

high in the three months to September, even as productivity growth 

slumped and the unemployment rate rose for the first time in nearly a 

year. 

     Employment rose by 23,000 to 32.4 million, after decline of 5,000 

in the three months to August, above the MNI median forecast of a 

14,50000 gain. That left the employment rate to 75.5%, unchanged from 

the June to August period. 

     But a 21,000 increase in unemployment to 1.38 million lifted the 

jobless rate by 0.1 percentage point to 4.1%, the first increase since 

the fourth quarter of 2017. That tops the median MNI forecast of 4.0%. 

Bank of England staff also predicted a 4.0% outturn for the third 

quarter. 

     Productivity, long the achilles heel of the UK economy, continued 

to disappoint, falling by 0.4% in the third quarter, reversing a 0.5% 

rise in the second three months of the year. However, output per worker 

rise by 0.5%, extending a 0.3% rise in the previous quarter. 

     But the Bank's long-awaited pick up in wage growth was evident in 

the latest employment report. Excluding bonuses, regular earnings, 

before adjusting for inflation, improved by an annual pace of 3.2% in 

the latest three-month period, topping the MNI median of a 3.1% gain, up 

from 3.1% in the previous period. 

     With inflation rising to an annual rate of 2.4% in September, real 

wages, excluding bonuses, increased by 0.9% in the latest period, the 

quickest pace since the fourth quarter of 2016, up from a 0.7% gain in 

the three months to August. 

     However, the Office for National Statistics uses the CPIH measure 

to discount nominal wages, which hit an annual rate of just 2.2% in 

August, or 0.2 percentage points below the price measure targeted by the 

Bank of England. When discounted by CPI, real regular wage growth rose 

by 0.7%, according to a National Statistics official. 

     Total weekly earnings increased by an annual pace of 3.0% in the 

three months to September, the fastest rate since the third quarter of 

2015, matching the MNI median forecast. 

     Price-adjusted regular earnings -- again, discounted by CPIH -- 

rose by 0.8% over the same period a year earlier, up from 0.5% in the 

three months to August. 

     Job vacancies rose by 14,000 in the third quarter to 845,000, the 

highest since records began in 2001, which could lift wage growth in 

months to come. 

     Employment of workers born in European Union countries outside of 

Britain slumped by 132,000 in the third quarter over the same period a 

year ago, the biggest fall since records began in 1997. 

 -London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]