UK wages rise at fastest pace in almost a decade


UK wages are growing at their fastest pace in almost a decade, suggesting the economy is continuing to operate with little slack. Average earnings excluding bonuses rose 3.1 percent in the three months through August, the most since January 2009, the Office for National Statistics said on Tuesday. Unemployment held at a 43-year low of 4 percent.
While wage growth remains below its pre-crisis average, muted productivity means that even a modest pickup could fuel inflation as companies raise prices to protect their margins.
Bank of England officials raised interest rates in August amid signs of intensifying labor shortages, though Brexit uncertainty means no further increases are expected before Britain leaves the European Union in March.
The pound held gains after the data, rising 0.4 percent to $1.3197 in London. There were some signs of weakness in the latest snapshot of the labor market, with employment falling for the first time since the autumn of last year. Unemployment declined, but only because of a sharp rise in the number of people counted as inactive, particularly students.
Wages are now growing faster than prices, providing relief for households squeezed by the inflation surge following the 2016 Brexit vote.

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