UK wage growth slows, jobless rate holds at 32-year low
British annual earnings growth unexpectedly slowed in October even though the jobless rate stood at a 32-year low last month, official data showed on Wednesday.
The Office for National Statistics said headline average earnings rose 4.0 percent on the year in the three months to October, easing from 4.1 percent in September and below forecasts for a rise of 4.2 percent.
The number of people claiming jobless benefits fell by more than twice the rate expected in November, by 11,100, taking the total down to 813,000 - the lowest since June 1975. The rate held at 2.5 percent, the weakest since April 1975.
While the figures show little immediate danger of inflationary pay growth, the ongoing tightness in the labor market will keep hawks on the Bank of England's Monetary Policy Committee focused on the upcoming New Year wage round.
"It's an encouraging combination of lower unemployment and weaker earnings growth, but I am not sure how long it can be sustained," said George Buckley, an economist at Deutsche Bank.
Earnings growth in the manufacturing sector crumbled to 2.5 percent - a record low - as last year's bonus payments were not repeated.
Services sector growth, however, picked up slightly to a rate of 4.4 percent, the highest since March.
Pay growth in the public sector also gathered pace to a rate of 3.2 percent from 3.0 percent in the three months to September.
The government has repeatedly called for wage restraint in the public sector, but given that earnings are rising far slower than the cost of living mean there could be more strident demands for higher pay in the coming months.
There were already 327,000 working days lost to industrial disputes in October, the highest since March 2006, and further stoppages could add to public discontent over Prime Minister Gordon Brown's rule.
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