UK wage growth slipped below 6% for the first time in almost two years, a sign that the labour market is cooling and boosting hopes that the Bank of England (BoE) will cut interest rates next month. Annual pay growth, excluding bonuses, averaged 5.7 % between March and May, according to figures from the Office for National Statistics (ONS), down from 6% last month.
Including bonuses, annual wages also rose 5.7%. This was down from 5.9% previously and is in line with expectations.
Wage growth is at its lowest since the three months to August 2022, when it stood at 5.4%.
Private-sector wage growth — which is closely watched by the BoE for signs of a tight labour market — slowed to 5.6% from 5.9%.
Liz McKeown, director of economic statistics at the ONS, said: “We continue to see overall some signs of a cooling in the labour market, with the growth in the number of employees on the payroll weakening over the medium term and unemployment gradually increasing.”
Meanwhile, the rate of UK unemployment remains unchanged at 4.4% for the same period.
The labour market figures are the last major set of statistics before the BoE’s next interest rate decision in two weeks.
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