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Wages up, unemployment down


Wage growth exceeded expectations in April, according to the Office for National Statistics.


Average regular pay growth in the private sector accelerated to 7.6%, the largest growth rate seen outside the pandemic period.


Wage growth continued to lag inflation, currently at 8.7%. However, the news meant that many economists felt an increase in interest rates was inevitable next week.


The unemployment rate unexpectedly fell to 3.8% in the three months to April.


"For the Bank of England, wage growth is a big problem – it is simply at too high a level to allow inflation to hit the 2% target," said Hussain Mehdi, macro and investment strategist at HSBC Asset Management.


He added: “With the possibility of higher-for-longer rates, a UK recession looks unavoidable as tight monetary policy filters into the real economy - including the housing market.”

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