In the UK, regular wages, excluding bonuses, saw a significant increase of 5.7% in the three months to the end of May compared with the same period last year. This measure is particularly important for the Bank of England as it assesses the appropriate timing for an interest rate adjustment.
The increase in wages is in line with the forecasts of most economists surveyed on the subject. The Bank of England (BOE) is due to announce its next interest rate decision in two weeks.
Following the release of unexpectedly high inflation data on Wednesday, the chances of an interest rate cut on August 1, which would be the first since 2020, are now regarded by investors as around one in three.
Data on wage growth is a crucial component for the BoE as it provides information about inflationary pressures in the economy, which is a key factor in the central bank’s decision-making process regarding monetary policy. The upcoming rate announcement is highly anticipated in light of recent economic indicators.
Reuters contributed to this article.
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