Annual British pay growth picked up modestly in the three months to November, mainly because of delayed bonus payments in real estate and business services, official statistics showed on Wednesday. Analysts said the mild rise, coupled with a larger than expected fall in claimant count unemployment in December, and mixed data in recent weeks suggested that the Bank of England could afford to be patient about further interest rate moves.
The Office for National Statistics said headline annual average earnings growth rose to 4.2 percent in the three months to November compared with 4.1 percent in the prior three month period and in line with market expectations.
On a single month basis, annual average earnings rose 4.5 percent in November compared with 4.2 percent in October, reaching the top end of the threshhold which the Bank of England has said is consistent with stable inflation.
But the ONS said that rise was mainly owing to a delay in bonus payments in the real estate, renting and business services sectors.
"Overall this release shows the labour market is tightening a bit but it does not significantly change the outlook for interest rates," said Alan Castle, UK economist at Lehman Brothers.
Excluding bonuses, so-called underlying annual average earnings growth was steady at 4.4 percent in the three months to November compared with October, although this was the highest rate since early 2002.
Interest rate futures briefly ticked lower on the figures before regaining ground as the earnings pickup was perhaps not as great as some in the market had feared after news on Tuesday of an unexpected acceleration in consumer inflation.
Some economists noted, however, that earnings growth could still pick up once figures are available for early 2005, when many pay deals are made.
CLAIMANT COUNT DOWN: The ONS said the claimant count measure of unemployment fell 6,200 in December, more than the 1,000 drop expected, providing further evidence of a tightening labour market. November's claimant count drop was revised to 4,100 from an initially-reported drop of 3,400.
The jobless rate was steady at 2.7 percent.
The more internationally-recognised ILO measure of joblessness rose 13,000 in the three months to November on the prior three month period, leaving the unemployment rate unchanged at 4.7 percent.
LFS employment, meanwhile, rose 99,000 in the three months to November.