Taking into account figures showing unemployment was steady at 4.4% in December and vacancies fell only slightly, Capital Economics said: “Overall, today’s data release provides little evidence that the Bank will deviate from its current gradual approach to interest rate cuts.”.
On the basis that they remain the best estimate by the ONS, a judgment that annual wage rises including bonuses hit 6% in December from 5.5% in November, when City analysts expected wages to increase by 5.9%, must be taken seriously.
However, there is another way to read the surprisingly strong increase in wages growth, which is even higher in the private sector at 6.2%, offset by a much lower increase in the public sector of 4.7%.
As the consultancy Capital Economics points out, data from HMRC shows employee wage growth up to January eased from 6.6% to 5.9% between November and January from the previous three months.
There is always an element of doubt about the labour market figures from the Office for National Statistics (ONS), which have taken a battering from MPs concerned about their accuracy after a drop-off in survey respondents.
