UK average earnings rise slows

The pound fell against the dollar and interest rate futures rose after the data but analysts said the figures were unlikely to…

The pound fell against the dollar and interest rate futures rose after the data but analysts said the figures were unlikely to alter expectations for a further rise in borrowing costs.

The Office for National Statistics said average earnings including bonuses rose 4.1 per cent, below forecasts for an increase of 4.2 per cent.

Claimant count unemployment fell by 5,500 in December, nearly double the 3,000 decline forecast by analysts and the third straight month of decline.

The ONS said that was the longest run of falls since the period between October 2004 and February 2005. It also said the claimant count trend was falling.

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The figures suggest earnings growth has been benign despite a tightening labour market and a higher cost of living. Policymakers have been on the look out for signs that inflation pressures are feeding into wage demands.

The Bank of England surprised financial markets last week with a rise in interest rates, citing concerns over inflation which picked up to 3 percent last month.

Retail price inflation - which is often used in wage negotiations - hit its highest rate in 15 years last month.

A breakdown of the ONS figures showed that while wages in private sector services jobs picked up in the three months to November, factory workers' earnings growth eased and public sector wage growth slowed to its weakest rate since mid-1998.

The internationally-comparable ILO jobless rate came in at 5.5 per cent in the three months to November, as expected. The number of people unemployed fell 29,000 to 1.674 million.

Average earnings in Britain rose less than expected in the three months to November, while the number of people claiming jobless benefits fell for a third straight month in December, official data showed today.