UK pay rises faster than expected
UK wages grew faster than expected in May, adding pressure on the Bank of England as it tries to bring down inflation. Employees’ regular average pay, which excludes bonuses, grew 7.3 per cent in the three months to May compared with a year earlier – higher than the 7.1 per cent forecast by analysts. Private sector wages grew 7.7 per cent, the fastest rate on record outside the Covid pandemic. Andrew Bailey, the Bank of England governor, and Chancellor Jeremy Hunt, joined forces last night to argue that wage restraint was needed to bring down inflation, now at 8.7 per cent. Employment data suggested that more people are back looking for work – with the unemployment rate rising slightly – but bringing more people into the labour market to manage pay levels takes time. In the short-term, investors – and mortgage holders – are bracing for more interest rate hikes.
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