Jump in wages puts pressure on Bank to increase rates again
A rise in borrowing costs is likely even though the latest figures for the UK labour market also showed employers had begun to shed workers in response to a slowdown in economic activity.
Total pay, including bonuses, rose by 8.2% a year in the three months to June, the Office for National Statistics (ONS) reported, stronger than the 7.3% analysts had expected.
Regular pay, which excludes bonus payments, rose by 7.8% in the quarter, the highest regular annual growth rate since comparable records began in 2001, up from 7.5% in March-May.
In response to concerns that pay increases could trigger a wage-price spiral, Rishi Sunak said his "number one priority" was to bring down inflation, and claimed there was "light at the end of the tunnel" in the cost of living crisis.
The number of redundancies increased and the unemployment rate rose by 0.3 of a percentage point to 4.2% in the quarter, the ONS said.
Policymakers at the Bank of England pushed the cost of borrowing to 5.25% earlier this month, the 14th consecutive interest rate rise. The money markets indicate there is an 84% chance of the Bank raising rates a quarter of a percentage point in September to 5.5% and a 16% chance of a half-point increase to 5.75%.
Interest rates are forecast to peak at 6% in February, higher than the 5.75% expected before yesterday's labour market report was released.
This story is from the August 16, 2023 edition of The Guardian.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the August 16, 2023 edition of The Guardian.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Local Elections Reform Fields at Least 60 Ex-Tory Candidates
More than 60 of Reform UK's council candidates standing in this year's elections are defectors from the Conservatives, according to research by the Labour party.
Under the Thames Divisive £2.2bn Silvertown tunnel opens in London
From high above the Thames, the portals of the new Silvertown tunnel are clearly visible: a black arch on the north Greenwich peninsula, a green conical building a mile across the water in Newham.
Cost of Easter rises as chocolate, hot cross bun and lamb prices soar
Exchanging Easter eggs and tucking into a roast dinner are among the highlights of the spring holiday but Britons face paying more for this year's celebrations after a sharp rise in the price of essentials such as chocolate, lamb and hot cross buns.
Mortgages Beware big fees as homebuying season arrives
The sums lenders charge to secure the best rates have risen in the past five years - and can make a loan more expensive, writes Zoe Wood
Shabana Mahmood Lord Chancellor with political nous unafraid to shake up system
Shabana Mahmood's potential as a future cabinet minister was first noticed by the former deputy Labour leader Tom Watson in the 90s over tea and samosas at her family's Birmingham home.
Bin collection strike Out and about with the rat catcher in Birmingham
\"They're not fussy,\" said Martin Curry, describing the far from epicurean appetites of the scurrying rodents that Brummies fear could flood the streets of their city.
It's a political attack' Far-right party tries to marshal support after Le Pen conviction
Near a chicken stand at a rural market, Jocelyn Dessigny was handing out leaflets bearing a photo of the French far-right leader Marine Le Pen and the words \"Save democracy!\" \"It is a political attack,\" he said of Le Pen's criminal conviction for embezzlement this week.
'What was their crime?' Relatives' grief and fury at Israeli massacre of paramedics
Gaza is one of the most dangerous places in the world to be a civilian now that Israeli forces have resumed their military campaign with even more ferocity but, for the first responders who rush towards the wreckage of bombed buildings, the risks are multiplied many times over.
Building bridges with Trump helped keep levy low, say insiders
Emerging into the spring sun from gate 17 at Volkswagen's main factory in Wolfsburg at the end of his shift on Thursday afternoon, Carsten, 63, pulled heavily on a cigarette and shook his head when asked about Donald Trump's tariffs.
Jason Isaacs: White Lotus role forces British actor to step into the limelight
He has worked in the industry for more than three decades and appeared in blockbuster films, but for a long time Jason Isaacs has avoided the limelight.
