British wages rose faster than expected last month, in a move that economists say could tip the Bank of England (BoE) to raise interest rates further in May, despite that unemployment rose unexpectedly.
The National Statistics Office reported that the unemployment rate rose to 3.8%, its highest level since the second quarter of 2022, instead of staying at 3.7%, as forecast by economists in a Reuters poll.
Annual wage growth in the three months to January was revised up to 5.9% and held at that level in the three months to February, above all forecasts in the Reuters survey for a decline to 5.1 percent.
High inflation meant that, in real terms, median income in the three months to February was 4.1% lower than a year earlier, one of the biggest annual falls since the ONS began recording data in 2001.
BoE chief economist Huw Pill stressed that there were signs of a slowdown in wage growth but that it is too early to say that the BoE’s job is done on monetary policy, which has raised rates 11 times. since December 2021.
