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UK wage growth accelerated more than forecast in the three months to October, curbing expectations that the Bank of England will hold off on interest rate cuts this week.
Average weekly earnings growth excluding bonuses rose to 5.2 per cent from 4.9 per cent in the three months to September. Office for National Statistics said on Tuesday. The figure was higher than the 5 percent expected by economists.
The acceleration was driven by 5.4 percent growth in the private sector, above the level the BoE believes is consistent with meeting its 2 percent inflation target.
KPMG chief economist, Yael Selfin, said the figures would "shut the door" on any chance of the Monetary Policy Committee cutting borrowing costs below 4.75 percent when it announces its latest decision on Thursday.
Following the data, traders trimmed their bets on a quarter-point cut this week by about 10 percent, in line with fixed levels in swaps markets.
Sterling was little changed at $1.27 in early trade.
Thomas Pugh, an economist at audit firm RSM UK, said the figures were "a nail in the coffin" on the likelihood of an interest rate cut this week.
Meanwhile, recruitment continued to slow over the period, with the number of vacancies falling.
Figures from the ONS showed that the number of paid workers rose by just 0.1 per cent between September and October, with the total number of paid workers falling by 0.1 per cent in the three months to October.
The ONS said the unemployment rate was unchanged at 4.3 percent in the three months to October, with employment holding steady at 74.9 percent, but These measures have not been reliable in the past year Because of problems with the survey that underpins them.
A separate quarterly survey of employers, published as part of Tuesday's data release, showed that the number of workforce jobs in September 2024 was 36.8 million, up 73,000 from June 2024.
Preliminary figures for November suggested that employers had cut staff following the budget, but these figures are subject to revision.
The BoE continues to grapple with wage pressures even as the economy slows. The economy unexpectedly shrank 0.1 percent in October, the second contraction in a row, in a blow to the Labor government's ambitions to boost growth.