Wage increases slowing down

22 August 2008

The rate at which wages are rising is at its slowest for five years.

According to the Office for National Statistics, average earnings for June were just 2.9 per cent higher than for the same period a year ago.

This puts wage growth at its weakest since 2003.

Even though the CPI rate of inflation hit 4.4 per cent last month, worries over job losses have meant that fewer employees appear prepared to push for above-inflation wage deals.

With wage inflation showing no signs of taking off, and with the spot price of oil falling significantly, the Bank of England may yet be tempted to introduce a cut in interest rates later in the year, some analysts believe.