UK wage growth matches record high but job market shows signs of cooling

economictimes.indiatimes.com:

British wages rose at the joint fastest pace on record but official data also showed signs that the inflationary heat in the labour market is cooling, offering the prospect of relief for the Bank of England.Sterling edged up but yields on two-year British government bonds, which are sensitive to speculation about interest rates, fell sharply, suggesting investors were dialling back their bets on how much higher the BoE would go with its run of rate hikes. «There were some tentative signs that the labour market may be turning… But this has to be balanced against still persistently strong wage growth,» Ellie Henderson, an economist with bank Investec, said. «The Bank will likely want to see an easing in the wage growth numbers before it can think about declaring an end to the fight against inflation.» The 7.3% surge in basic earnings in the three months to May compared with the same period a year ago was the joint highest alongside April's growth — which was revised up on Tuesday from an initial 7.2% — and the second quarter of 2021, according to data which goes back to 2001.

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Economists polled by Reuters had forecast a 7.1% rise and said the stronger-than-expected increase left the BoE on course to raise interest rates for the 14th time in a row on Aug. 3, probably by another half-percentage point. Before then, the statistics office will announce June's inflation data. Sterling edged up to a 15-month high against the dollar and also gained moderately against the euro. Markets saw a roughly 50% chance of the BoE's benchmark rates hitting a peak of 6.5% in early 2024, up from 5% now.INFLATION PRESSURE

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