HomeFinancial MarketsBoE Rate Hike More Likely Following Record UK Pay Growth

BoE Rate Hike More Likely Following Record UK Pay Growth

Regular pay in the UK grew by 7.3% during the period of March until May, figures from the Office for National Statistics (ONS) on Tuesday showed. This matches the highest growth rate on record.

This development has boosted fears that the Bank of England (BoE) will implement a more aggressive monetary policy going forward in an effort to suppress stubbornly high inflation.

While pay rises may help workers to cope with a rising cost of living, wage growth still trails inflation, which is currently at a level of 8.7%.

According to the ONS, the UK is facing an increasing unemployment problem, with the UK jobless rate rising to 4% for the three months ending May from 3.8% in the previous quarter.

“Total employment grew in the latest three months while the number of people actively looking for work also increased, both driven by men rejoining the labor market,” ONS director of economic statistics Darren Morgan commented. Chancellor Jeremy Hunt added, however, that there are still about one million job vacancies in the UK at present.

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