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The growth of wages in the United Kingdom has remained strong in the three months until January in a slow rental context, according to official data which, according to economists, would strengthen the case for the Banque d’Engleterre to maintain interest rates today.
The annual growth in average weekly profits, excluding bonuses, was held 5.9% in the three months and January, the national statistics office announced on Thursday. The figure was in line with the expectations of economists.
Including bonuses, the growth of wages of the period dropped slightly at 5.8%, against 6.1% in the three months and December.
Distinct figures based on tax files have shown that payroll employment was stable, with a marginal increase of 9,000 employees between December and January, because companies were concerned about slow economic growth, the threat of trade wars and imminent increases in minimum taxes and wages.
Employment increased by only 0.1% compared to the year to January. But the provisional figures in February showed certain signs of crawling confidence, with an increase of 21,000, or 0.1% over the month. The initial estimate of the last month has often been revised in the past.
The combination of strong salary growth and lower hiring is difficult for the BOE monetary policy committee, which should keep interest rates at 4.5% when it was announced on Thursday.
“With the cooling of the labor market rather than the collapse and growth of wages wedged in the range of 5.5 to 6.0%, we doubt that the Bank of England will reduce interest rates of 4.50% today,” Ruth Gregory told Capital Economics. But she added: “All this leaves the bank in a delicate position.”
The MPC fears that the job market will deteriorate more, but it has also become more pessimistic about the pace to which the British economy can grow without catching up the prices. Inflation was 3% in January and should climb higher by the middle of the year.
Andrew Bailey, the Governor of the BOE, said last month that there was a risk that budgetary tax increases could both increase prices and reach jobs more than the BOE at the start, because employers in certain sectors could not reduce wages for staff already on minimum wages.
