Wait and see

11 June 2014 By Swaha Pattanaik Follow @swahapattanaik

No one fully understands why falling UK joblessness isn’t leading to faster pay increases. Open EU borders and delayed retirements might be an explanation. Either way, glacial wage inflation gives the Bank of England an excuse to keep rates low for longer than the market expects.

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Britain’s jobless rate fell to 6.6 percent between February and April, its lowest since the three months through January 2009, according to the Office for National Statistics. That was down from 6.8 percent in the first three months of this year and below the 6.7 percent rate expected in a Reuters poll.

In the three months through April, total pay including bonuses rose a yearly 0.7 percent, slowing from 1.9 percent in the three months to March. Excluding bonuses, pay rose by an annual 0.9 percent in the three months through April.

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