Official figures today showed that annual British wage growth slowed as expected in the three months to November while the jobless rate moved up to 5%, its highest in more than two years.
The Office for National Statistics said annual average earnings slowed to 3.4% from 3.6% in the previous period, exactly as economists had expected. That was the weakest since July 2003.
The ONS said the slowdown in earnings was mainly due to the fact that a number of one-off bonuses in the financial services sector that were paid in October and November last year were not repeated this year. Excluding bonuses, annual pay growth slowed to 3.8% from 3.9%, the weakest since February 2004.
The ONS said that both measures of unemployment also rose in a set of figures that are likely to support expectations that the labour market and wage pressures are easing, leaving the Bank of England room to trim interest rates this year.
Claimant count unemployment increased by 7,200 in December, a bit less than the 8,000 rise economists had expected and after a revised rise of 10,400 in November. On the more internationally-recognised ILO measure, the jobless rate spiked to 5% in the three months to November from 4.7%, its highest since October 2003.
