British average earnings rose at their weakest pace in 1.5 years in the three months to May, official data showed today, suggesting the recent rise in the cost of living has not filtered through into wages.
The Office for National Statistics said average earnings including bonuses in the three months to May rose 3.5 per cent on the year, below forecasts for a rise of 3.6 per cent and the weakest reading since November 2005.
Excluding bonuses, wage growth was also weaker than expected, rising by 3.5 per cent - its lowest since September. However, the figures also showed a tightening labour market.
The number of people claiming jobless benefits fell by 13,800, more than the 8,000 fall forecast. On the internationally comparable ILO measure, the number of unemployed saw its biggest drop since December 2003.
That took the jobless rate down to 5.4 per cent - its lowest in a year. The figures are unlikely to shed much light on the outlook for interest rates, with the Bank of England now more concerned about price pressures and capacity constraints than a wage-price spiral.