U.K. Wages Grow at Fastest Pace Since 2008 in Tight Labor Market

Tuesday, 22 January 2019 17:09 WIB

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Britons are enjoying the strongest wage growth since the financial crisis a decade ago as the labor market tightens.

Average earnings excluding bonuses continued to increase an annual 3.3 percent in the three months through November and unemployment fell to 4 percent, matching the lowest since 1975, the Office for National Statistics said Tuesday. Separate figures showed the budget deficit unexpectedly widened in December.

Wage growth including bonuses accelerated to 3.4 percent in the latest three months, the fastest pace since 2008.

With earnings forecast to accelerate further, the Bank of England might normally be preparing to raise interest rates. But with no-deal Brexit fears mounting, and inflation expected to fall below target this month, traders put the chance of a hike this year at less than 70 percent.

The number of people in work jumped a larger-than-forecast 141,000, leaving the employment rate at a record 75.8 percent. Job creation was driven by full-time employment. Unemployment rose 8,000 as economic inactivity fell sharply.

Hanging over the outlook is a cooling world economy and Brexit, with Parliament deadlocked over the way forward less than 10 weeks before Britain is due to leave the European Union.

A 3 billion-pound ($4 billion) budget deficit in December left the shortfall in the first nine months of the fiscal year at 35.9 billion pounds -- almost 27 percent lower than a year earlier.

Source: Bloomberg