HomeTop Global NewsRecord UK Wage Growth Raises Bets on Bank of England Rate Hike

Record UK Wage Growth Raises Bets on Bank of England Rate Hike

UK wage growth hit record numbers on Tuesday, with the Bank of England looking increasingly likely to continue its interest rate hikes when reconvening on September 21 for its next policy meeting. Average wages excluding bonuses jumped 7.8% in the three months ending June compared to the previous year.

In addition to outpacing the 7.5% growth during the previous quarter, the Office for National Statistics announced that this is the highest level that wages have increased since 2001. Wage growth outpaced experts’ estimates of a 7.4% rise.

Governor Andrew Bailey as well as other BoE policymakers maintain that this rising wage growth could push the central bank to implement a rate hike in September as prices continue to be pushed higher. “It very much leaves the BOE facing the conclusion that it may yet be forced to engineer a recession in order to finally get the inflation genie back in the bottle,” Stuart Cole, the chief macro economist at Equiti Capital in London observed.

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