UK wages grow 3.4% on year in three months to April

British annual wage growth excluding bonuses was 3.4% in the three months to April, while the unemployment rate was 4.9%, ahead of the Bank of England's interest rate decision.

British annual wage ​growth, excluding bonuses was 3.4% ​in the three months ‌to April ​while the unemployment rate was 4.9%, official figures showed on Thursday, hours before the ‌Bank of England announces its next interest rate decision. Economists polled by Reuters had forecast wage growth of 3.2% and a jobless rate ‌of 5.0%.

The BoE is closely watching Britain's job market ‌to see if higher oil prices caused by the Iran war trigger bigger wage rises, or if demand for workers is too weak for people ⁠to ​be able to bargain ⁠for higher pay. The central bank is widely expected to keep interest ⁠rates on hold at 3.75% later on Thursday, and most policymakers think the ​job market now is weaker than in recent years, ⁠making outsize wage rises less likely.

After Russia's full-scale invasion of Ukraine in 2022, inflation ⁠peaked ​at 11.1% and wage growth spent nearly three years above 5%, contributing to the BoE's difficulty getting inflation back ⁠to its 2% target. The central bank judges that wage growth much ⁠above 3% ⁠makes it hard to achieve 2% inflation on a lasting basis due to persistently weak productivity growth.