Average Earnings Up 6.0% YoY, Unemployment Rises Slightly

  • U.K. wage growth remains strong despite inflation concerns
  • Average earnings excluding bonuses up 6.0% YoY in Q1 2024
  • Unemployment rate edges up to 4.4% in Q1 2024
  • Vacancies fall by 12,000 in the period
  • Real wages rise due to energy and food price declines

The U.K.’s wage growth continues to be a concern for the Bank of England as they prepare for a policy meeting next week. According to data from the Office for National Statistics (ONS), average earnings, excluding bonuses, increased by 6.0% year-on-year in Q1 2024, slightly lower than the expected 6.1%. While annual inflation slowed to 2.3% in April, approaching the Bank of England’s (BOE) 2% target, labor-intensive services sector prices rose by 5.9%. Policymakers anticipate holding rates at a 16-year high on June 20, with investors focusing on an August 1 meeting as a potential date for the central bank’s first rate cut since March 2020. The European Central Bank (ECB) recently cut its key interest rate. However, the BOE may find some optimism in the cooling labor market, as unemployment rose to 4.4% and vacancies fell by 12,000 in Q1 2024. Real wages increased by 2.3% YoY due to energy and food price declines.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about wages, inflation, and unemployment rates in the UK, citing data from the Office for National Statistics. It also discusses the Bank of England’s potential actions regarding interest rates and mentions the European Central Bank’s recent decision. However, it includes a brief mention of the Conservative Party’s performance in the upcoming general election, which could be seen as slightly tangential to the main topic.
Noise Level: 6
Noise Justification: The article provides relevant information about wages and inflation in the UK, but includes some irrelevant details such as the mention of the general election and opinion polls, which are not directly related to the main topic. It also has a slight repetition with the mention of the Bank of England’s policy meeting and rate expectations.
Key People: Joachim Nagel (German central bank governor), Ed Frankl (Writer)

Financial Relevance: Yes
Financial Markets Impacted: Bank of England, European Central Bank
Financial Rating Justification: This article discusses wage growth in the U.K., inflation rates, and central bank policies which can impact financial markets and companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the article. It discusses economic indicators and their potential impact on central bank policies, but does not describe any catastrophic or severe events.

Reported publicly: www.wsj.com