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Wage growth at weakest level since January

10:56 am, 17th July 2018

The Office for National Statistics (ONS) reported that average weekly wages, excluding bonuses, rose by 2.7% in the three months to May.

That was down from 2.8% the previous month and its peak of 2.9% between January-March.

The 2.7% figure marked, the ONS said, the slowest rate of wage growth since it reported salary progress in January.

Rising wages have been a key factor for the Bank as it prepares to determine again if the economy is strong enough to withstand an increase in borrowing costs.

It held off in May as policymakers awaited evidence on whether an economic chill in first quarter of the year – largely blamed on the so-called Beast from the East – was temporary.

Support on the monetary policy committee for a Bank rate rise from 0.5% later grew when it recorded a 6-3 vote in favour of no change – the Bank’s chief economist joining the hawks.

Governor Mark Carney has since signalled an increase could be appropriate in August as evidence points to a recovery for the economy during the second quarter – aided by the royal wedding, return of good weather and football’s World Cup.

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