top of page

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.”


bottom of page