UK wage growth hits 7.3%: 'We have not reached the end of the hiking cycle'

investmentweek.co.uk:

However, all of the metrics remain below inflation, which failed to fall last month and remains stuck at a CPI rate of 8.7%.

According to data from the Office for National Statistics, while regular pay without bonuses increased 0.1 percentage points, pay with bonuses rose 0.4 percentage points to 6.9%.

Public sector pay was up 0.2 percentage points to 5.8%, while private sector pay has increased 7.7% over the past year, 0.1 percentage points higher than last month's year-on-year figure.

Bank of England's Dhingra: 'Promising signs' for drop in UK inflation

However, all of the metrics remain below inflation, which failed to fall last month and remains stuck at a CPI rate of 8.7%.

Chancellor Jeremy Hunt praised the strong jobs market with a low unemployment rate by historical standards (4%) but argued the roughly one million job vacancies continue to «push up inflation even further».

Head of fixed interest research at Quilter Cheviot Richard Carter argued this morning's (11 July) wage data will likely result in further interest rates rises from the Bank of England, matching market consensus, which is currently pricing in a terminal rate of 6.5%.

«On the face of this data, we still have not quite reached the end of the hiking cycle yet,» Carter said. «Due to the Bank of England still grappling with stubborn inflation, the base rate is now 5%, piling more pressure on the economy and in turn businesses will start to struggle. This should start to slow wage growth as businesses simply do not have the spare cash available to provide bump ups in salaries and employees also start to feel less confident in their job security so are less likely to push hard for a raise.

»Wage growth tends to be a lagging indicator, so while