Good News for Workers
Official figures released by the Office for National Statistics (ONS) show that wages are still on the rise for millions of workers across the UK. In the three months to October, regular pay, excluding bonuses, stood at 7.3%, outstripping inflation rates.
Unemployment Remains Stable
The rate of UK unemployment remained unchanged at 4.2% in the same period, according to the ONS. This stability in the job market is a positive sign for the economy.
Real Wage Growth
While wage growth has slowed slightly, it still outpaces inflation. Taking into account inflation, wages increased by 1.3%, meaning that workers' pay is growing in real terms.
Battle Against Inflation
The growth in wages is good news for workers who have been battling against high inflation in recent months. The annual rate of inflation was 4.6% in the year to October, down from 6.7% in September.
Promises Kept
Prime Minister Rishi Sunak has fulfilled his promise to halve inflation, which he made at the beginning of the year. The rate had reached 10.7% during the cost of living crisis.
Impact on Household Budgets
While rising wages can ease the pressure on households, there is a risk that it could fuel inflation if businesses pass on the cost to customers by increasing prices. This could add extra pressure to household budgets, particularly as energy prices are under threat from geopolitical tensions and rising demand.
Bank of England's Response
The Bank of England has previously blamed high wage growth for keeping inflation rates high. However, the bank recently held the base rate at 0.25 percentage points, easing pressure on homeowners facing rising mortgage rates. Experts are now predicting that interest rates could be cut by the bank as soon as May.
Predictions for the Future
Analysts at Morgan Stanley predict that falling energy costs will bring down inflation, potentially leading to a reduction in interest rates. They forecast that rates could be lowered to 4.25% by the end of next year.
Good News for Borrowers
If interest rates are cut, it would mean a decrease in the cost of borrowing for consumers, including loans, credit cards, and mortgage repayments. This would provide some relief to household budgets.
Did you miss our previous article…
https://hellofaread.com/money/nestle-discontinues-more-sweet-treats-leaving-brits-begging-for-their-return/
