By Ed Frankl
U.K. wage growth eased a little less than forecast in the fourth quarter, while unemployment unexpectedly ticked down, signaling a stubbornly tight labor market and reflecting inflationary pressures as the Bank of England weighs when to start cutting interest rates.
Average pay growth, excluding bonuses, was 6.2% in the three months to December, from 6.7% in the three-month period to November, according to data published Tuesday by the Office for National Statistics.
Meanwhile, the rate of joblessness was 3.8% between October and December, lower than the 3.9% in the three months to November, it said.
That compared with expectations of 6.1% for wage growth and 4.0% for the unemployment rate, according to a consensus of economists polled by The Wall Street Journal.
The latest unemployment data incorporates updates made by the ONS to prior months, which revealed that the U.K.’s labor market was markedly tighter than originally thought. In first-published data, the rate of jobless in the three months to November was 4.2%, rather than 3.9%.
While falling wage growth will raise confidence among Bank of England policymakers that rate cuts could be coming into view, a lower unemployment rate and wages easing slower than expected could push back some speculation.
Write to Ed Frankl at edward.frankl@wsj.com
