Annual pay growth in Britain in the three months to October slowed to its weakest rate in more than two years as large financial sector bonuses a year earlier were not repeated, official figures show today.
The Office for National Statistics said headline average earnings fell to 3.6% from 4.1% in the previous three-month period. That was the weakest since August 2003 and compared with analysts' forecasts of 3.9%.
The jobless total, meanwhile, rose by 10,500 in November, the 10th consecutive monthly increase, for a rate of 2.9%. That was also higher than expected and followed an upwardly-revised 13,500 rise in October.
Interest rate futures rose and the pound slipped on raised expectations of another Bank of England interest rate cut next year as policymakers' fears of higher inflation spilling over into pay have so far proven unfounded.
But the earnings slowdown may be temporary as the ONS said it was a result of large one-off bonuses in the financial sector in October 2004 not being paid out this year.
The BoE held interest rates at 4.5% last week for the fourth month and policymakers have indicated they are in no hurry to change borrowing costs in either direction as they wait for more data on pay and the key Christmas shopping season.
