(Reuters) – Salary growth in the United Kingdom has slowed down in May and the active population has decreased again last month, but the British labor market seems to slow down less quickly than planned by the Banque d’Engleterre (BOE), show the data published Thursday by the British Statistics Office.
The average weekly salary, excluding premiums, increased by 5.0% over one year during the period, against a consensus at 4.9% and after growth of 5.2% over the three months to the end of April.
The April figure concerning wage growth was slightly revised upwards, at 5.3%, while the provisional estimate of a drop of 109,000 jobs in May, the highest drop since the start of the pandemic, was considerably revised downwards, to 25,000 jobs.
The drop in the number of employees in June was provisionally estimated at 41,000. The figures published by the British Statistics Office come from data from the tax administration.
The unemployment rate in Great Britain for the three months to the end of May has increased from 4.6% to 4.7%, its highest level since the second quarter of 2021, unlike the forecasts of the economists questioned by Reuters, who tamed on stability.
This increase seems to reflect the fact that more people enter the labor market to seek a job.
“These latest figures mitigate the immediate pressure on the Bank of England to accelerate the drop in interest rates. Although the labor market continues to weaken, the high revision up to the number of employees declared in May draws up a less alarming table than before,” said Jack Kennedy, senior economist at Indeed, recruitment site.
British bond yields at five years have reached their highest level in one month after the publication of this data.
The BO is closely monitored wage growth and the active population in order to detect any sign indicating that the pressure on internal prices could prove persistent, in particular after the publication Wednesday of data showing that inflation in June has reached its highest level since January 2024, at 3.6%.
Most of the Bank of England’s political leaders consider that annual wage growth of around 3% is desirable for consumer prices inflation to remain close to its 2% medium -term objective.
(Written by Mara Vîlcu, edited by Augustin Turpin and Kate Entringer)
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