Pay after inflation rises at fastest rate since 2021

UK pay after inflation rose at its fastest rate in over three years, with a 3.4% increase in pay packets between September and November after accounting for price rises. Strong private sector wage growth outpaced public sector earnings, leading to expectations of a Bank of England interest rate cut to 4.5% in February despite concerns about potential inflationary pressures from rising wages. The UK’s unemployment rate rose to 4.4% while vacancies decreased, with caution advised on interpreting jobs data due to low response rates, as businesses may face pressure to cut costs amid higher National Insurance bills, potentially impacting wage rises and staffing levels.

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