Data released by Office for National Statistics (ONS) in the UK showed that UK jobless rate held steady at 5.1% in the three months to December, though that’s still the lowest since the start of 2006. Pay growth picked up, albeit still at a frustratingly modest rate. Including bonuses, pay was 2.1% higher than a year ago in the three months to January, up from 1.9% in the closing quarter of last year.
Pay pressures clearly remain subdued by historical standards, especially given the current low rate of unemployment and strong demand for staff and highlights the fact that economic growth is failing to feed through to average workers’ incomes. Data darkens the inflation outlook further and raises the likelihood of the next moving by the Bank of England being more stimulus.
“Data add to fears that low inflation is continuing to hold down pay growth in February, sending a very dovish signal for central bank policy,” notes Chris Williamson, Chief Economist, Markit in a report.
