Official data on Tuesday showed on a sudden note that the unemployment rate in Britain had fallen to 4.2 percent and wage growth slowed down to its lowest level since almost two years ago.
The Office for National Statistics (ONS) said in a statement that the unemployment rate for the second quarter was compared to 4.4% for three months ending May.
Analysts’ consensus was for a slight increase in the rate.
According to ONS, wage growth excluding bonuses fell from 5.8% over the same reporting period to 5.4%, marking its lowest point since August 2022.
Even though job vacancies continue declining, there are still more than before pandemic, according to Liz McKeown, Director of Economic Statistics at ONS.
Wednesday’s inflation numbers is followed by second-quarter growth figures out Thursday as British economic data comes thick and fast this week.
Taken together, these records could give hints about what pace future interest-rate cuts by the Bank of England may take place.
Ruth Gregory , deputy chief UK economist at research group Capital Economics says: “The further easing in wage growth will be welcomed by the Bank of England as a sign that labour market conditions are continuing to cool.”
“This provides some backing for our forecast that the Bank of England will proceed with further two 25 basis-point interest rate cuts later this year.”
In early August, BoE cut borrowing costs for first time since Covid-19 pandemic onset back in early 2020.
This follows after UK inflation fell sharply from four-decade highs.
