Good news for workers: wages are up. According to the latest data, released by the Office for National Statistics this morning, annual pay increased by 5.2 per cent in the three months leading up to October.
Despite inflation returning broadly to the Bank of England’s 2 per cent target, these above-inflation wage increases will be providing relief, still, for workers who are still coping with significantly higher prices as a hangover from the inflation crisis. But a positive story for employees is often more worrying news for Threadneedle Street, which insists that wage increases risk second-round inflationary effects. Today’s news has markets speculating that the Bank may slow its rate-cutting process further: between the public sector wage hikes over the summer, rising private sector wages, and the Budget’s borrow-to-spend plans, an already hawkish Bank may well go slower in its bid to reduce the base rate.
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