UK pay growth accelerates as real wages climb, fuelling BOE concerns

By Investor Empires On Feb 18, 2025

The payment growth in Britain increased at the end of last year, as it provided news of the employees, but put a new dilemma for the England Bank.

The newly released data from the National Statistical Office (ONS) show that total wages increased by 6 % on an annual basis in the last quarter of 2024 – from 4.4 % in July to September – exceeding the expectations of economists.

Regular wages (except for rewards) grew by 5.9 % in October to December, after reaching 4.9 % in the previous three months. It is important in a place, both measures exceeding inflation and raising real wages by 3.4 % over the same time frame. Although this rise will encourage many families, it may provide constant anxiety in the Bank of England, which reduced interest rates earlier this month but is still cautious about continuous inflationary pressures.

According to The ONS, “Growth in wages, with the exception of rewards, has increased for a third consecutive period, with increases in both the public sectors. After taking into account inflation, real wage growth also increased slightly.”

The latest job report provides a mixed photo. Employment reached those between the ages of 16 and 64 years by up to 74.9 %, while unemployment reached 4.4 %, and also rises compared to the same period last year. Meanwhile, the rate of economic non -activity decreased to 21.5 %, indicating that some individuals have returned to the workforce. The number of people demanding unemployment benefits in January 2025 increased to 1.75 million, raised monthly and annually.

Economists have warned that high borrowing costs may inhibit wage growth, however, strong demand for employment, along with low unemployment, had paid profits. After paying interest rates to the highest level in 16 years, the Bank of England lowered its basic price by 25 basis points this month, to 4.5 %. More discounts are expected later in the year. However, if wages continue to overcome inflation, the bank may find itself under renewable pressure to achieve an accurate balance between stimulating growth and taming.

Jimmy Young

Jimmy is a major business correspondent, as he brings more than a decade of experience in the commercial reports of small and medium -sized companies in the United Kingdom. Jimmy holds a certificate in business administration and regularly participates in industrial conferences and workshops. When not reporting the latest business developments, Jimmy is excited to direct journalists and new businessmen to inspire the next generation of business leaders.