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Sterling falls as wage growth cools further in November

Published 16/01/2024, 09:01
© Reuters.  Sterling falls as wage growth cools further in November
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Proactive Investors - The pound dropped after figures showed UK wage growth slowed in the three months to November, boosting hopes that an early interest rate cut could be on the way.

The annual pace of growth in average earnings, including bonuses, slowed to 6.5% in the three months to November, the Office for National Statistics (ONS) said.

That was down from a summer peak of 8.5% and compared with a rate of 7.2% per cent in the three months to October.

It was also lower than the 6.8% City economists had pencilled in.

Meanwhile, annual growth in earnings excluding bonuses slowed to 6.6%, in line with analysts’ expectations and compared with 7.3% the previous month.

ONS director of Economic Statistics Liz McKeown said: “While annual pay growth remains high in cash terms, we continue to see signs that wage pressures might be easing overall. However, with inflation still falling more quickly, earnings continued to grow in real terms.”

Jobs data showed that between October and December, the number of vacancies in the UK fell by 49,000 on the quarter to 934,000.

Vacancies fell on the quarter for the 18th consecutive period, the longest consecutive run of quarterly declines ever recorded but still above pre-coronavirus (COVID-19) pandemic levels, the ONS said.

The unemployment rate was largely unchanged on the quarter to November at 4.2%.

The pound fell sharply after the figures were released with the market pricing in five interest rate cuts in 2024.

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