British wages rose more than expected in the three months to July and the number of people claiming jobless benefits fell to give the lowest unemployment rate in two years, official data showed today.
The Office for National Statistics said average earnings rose 3.5 per cent, up from an upwardly revised 3.4 per cent in the three months to June and above forecasts for a reading of 3.4 per cent.
Despite a stronger than expected rise in overall earnings, public sector wages grew at their weakest rate since May 1998.
On the month, earnings surged at their fastest pace since February, up 3.8 per cent. The ONS said the pick up was driven mainly by the timing of bonus payments in the financial sector.
The figures are unlikely to alter expectations that interest rates have peaked but policymakers may be concerned to see wage growth accelerating and the labour market continuing to tighten.
The number of people claiming jobless benefits fell much less than expected in August, although the level has been falling for nearly a year taking the unemployment rate down to its lowest since April 2005 at 2.6 per cent.
The claimant count fell 4,200 last month, almost half the amount expected by economists.