UK wages rise most since ’15 as end to squeeze nears

Bloomberg

UK wages are rising at their fastest pace in almost three years, raising the prospect of an end to the squeeze on living standards.
Annual pay growth excluding bonuses accelerated to 2.8 percent in the three months through February, the Office for National Statistics said on Tuesday.
Inflation averaged 2.9 percent in the same period and is forecast to fall toward 2 percent this year.
The return of real-income growth will be good news for hard-pressed households after more than a year of wages lagging behind prices.
That suppressed consumer spending in 2017, holding back overall economic growth.
The wage figures may reinforce speculation that the Bank of England will raise interest rates again next month, despite the economy being disrupted by bad weather in the first quarter. Officials fear home-grown inflationary pressures are building as labor shortages leave firms struggling to fill vacancies.
Bloomberg Economics says data does just enough to endorse May ‘Limited and Gradual’ means just one BOE move in 2018 UK households are still holding back on spending The economy isn’t as strong as it looks. While a hike next month is almost certain, “what happens thereafter is less clear,” said James Smith, an economist at ING in London. “Brexit talks still have the potential to get noisy in the autumn. Coupled with ongoing economic fragility, this could complicate efforts to hike again later in 2018.”
Employment rose to a record high between December and February after the economy added 55,000 jobs, the ONS figures showed. The jobless rate fell to 4.2 percent, the lowest since 1975 and below the BOE’s estimate of the equilibrium rate.