XpertHR Signals Wage Growth Plateauing at 6%

The UK XpertHR Pay Awards survey found median basic pay deals in the private sector held steady at 6% in the three months to May, unchanged for a fifth-straight rolling quarter.

• This follows last week's ONS April/May data, which signalled tighter labour market conditions as both employment and wages recorded substantial growth.
• According to the ONS, April wages rose +7.2% 3m/yoy (weekly earnings ex bonuses), a 0.4pp acceleration to a series-high increase outside the pandemic years (the series began 2001).
• Today's XpertHR report sees wages having peaked, yet remaining elevated. Sheila Attwood, XpertHR data and HR insights, noted "employers continue to report skills shortages and retention challenges ... likely to be behind some of the increases".
• Strong wage data alongside sticky inflation make uncomfortable reading for the MPC ahead of tomorrow's rate decision. UK May CPI is due at 0700 BST, whereby consensus expects a 0.3pp deceleration to +8.4% y/y. Core CPI is seen holding steady at +6.8% y/y, after jumping a surprise 0.6pp in April. Should May inflation be in line with consensus estimates, this would outpace BOE projections which anticipated a sharp fall from April.