Wages keep growing above inflation, dampening hopes for interest rate cut ahead of General Election

11 June 2024, 07:54

Commuters crossing London Bridge, in central London, during the morning rush hour.
Commuters crossing London Bridge, in central London, during the morning rush hour. Picture: Alamy

By Kit Heren

Wages are continuing to grow strongly, which may mean that the Bank of England is less likely to cut interest rates later this month.

Listen to this article

Loading audio...

Basic pay rose by 6% in the three months to April, flat on the figure reported by the Office for National Statistics (ONS) a month ago.

This was in part down to the government's 9.8% increase to the National Living Wage, which came into force in April.

That is good news for workers but may mean that the Bank decides not to cut interest rates on June 20, which would be a blow to people looking to secure a mortgage.

The ONS also said that unemployment increased slightly to reach its highest rate since the summer of 2021, signalling a weakening jobs market.

Read more: Reeves accuses Sunak of gaslighting Britain on economy as research claims Inflation 'costs UK same as 1% tax hike'

Read more: Sunak claims 'economy has turned a corner' and 'plan is working' at first campaign rally after announcing election

Three things Tories need to see in Rishi Sunak's manifesto

The rate of UK joblessness increased to 4.4% in the three months to April, up from 4.3% in the three months to March.

Some economists had thought the unemployment rate would stay unchanged - but instead it reached its highest level since the period from July-September 2021.

Vacancies also dropped sharply once again, down 12,000 to 904,000 in the three months to May - the 23rd fall in a row.

The ONS said: "This month's figures continue to show signs that the labour market may be cooling, with the number of vacancies still falling and unemployment rising, though earnings growth remains relatively strong."

Natasha Clark on significance of party manifestos being released this week

Rebecca Florisson, an analyst at the Work Foundation think tank at Lancaster University, said that despite the strong wage growth, many people did not feel like they were growing richer.

"There are signs that the wage growth recovery has peaked," she said, adding that "the economic impact of the Covid-19 pandemic and the war in the Ukraine has made this the first Parliament since 1955 where living standards have declined."

Ms Florisson said that "the reality is that most people are feeling poorer than when they last voted in the last General Election nearly five years ago.

She added that parties' General Election manifestos "must prioritise de-risking the journey back into work, through high quality employment support and designing jobs that offer people adequate reward, security, flexibility and progression."

More Latest News

See more More Latest News

Labour is said to be drafting options for wealth taxes

Labour 'draws up plans for wealth taxes' in bid to 'unlock' funds for public services

Nigel Farage said that the West had provoked Putin into invading Ukraine

'We gave Putin an excuse': Nigel Farage says the West provoked Russia into invading Ukraine

Just Stop Oil plans major disruption to summer holidays with private jet stunt just the start

Two charged after Just Stop Oil protesters sprayed private jets with orange paint at Stansted Airport

Prime Minister Rishi Sunak

Tories raise less than £300k in second week of election campaign, as over three-quarters of all donations go to Labour

File photo of passengers boarding an Easyjet plane

Chaos as Easyjet kicks 26 men off flight headed from the UK to Portugal for 'disruptive behaviour'

Bardia Shojeifard

'Outwardly normal' teen killer with 'worrying interest in knives' posed with huge blade before murdering Alfie Lewis, 15

Police were called to a property at Shorncliffe Road shortly after 3pm on Sunday

Pictured: Baby girl mauled to death in Coventry dog attack at family home

Public schoolboy guilty of attempted murder after vicious clawhammer attack on sleeping staff and students ahead of 'zombie apocalypse'

Public schoolboy obsessed by 'zombie apocalypse' guilty of claw hammer attack on sleeping staff and students

PC Idominik Efeotor raised the issue at the annual State of London debate

'The people who investigate the officers are the problem’: Black Met officer hits out at disproportionate treatment in disciplinary process

Salisbury Novichok victim Dawn Sturgess

Former spy and daughter may give evidence at Salisbury poisonings inquiry

Rishi Sunak has urged voters not to let Labour 'waltz into office'

'Don't let Labour waltz into office', Sunak tells voters as Brits may not 'ever' be able to get them out of power

Exclusive
Starmer says eco mob 'needs to feel the full force of the law' as he slams 'pathetic' Just Stop Oil

Starmer says 'pathetic' eco mob 'needs to feel the full force of the law' as two charged for private jet stunt

The M6

Drivers face misery as major motorway closed for three days next week, sending cars on 90 minute diversion

Kings College Hospital NHS Trust is one of two London Hospitals affected by the hackers

Russian hackers publish NHS patients' details and blood test results online after London hospital cyber attack

Bardia Shojaeifard killed Alfie Lewis

'Outwardly normal' boy, 15, who murdered teenager Alfie Lewis named for first time as judge lifts anonymity

Helicopters, sniffer dogs and 4x4s have been deployed in the search for Jay Slater.

Helicopters and sniffer dogs deployed as Spanish authorities focus on new terrain in search for missing Jay Slater