UK Wage Data Strong

UK pay growth held at its fastest pace in a decade in late 2018 and job creation remained strong, official figures showed this morning, suggesting the labour market was staying buoyant ahead of Brexit.

Total earnings, including bonuses, rose by an annual 3.4 percent in the three months to December, remaining at its fastest pace since mid-2008.

The increase was a touch below a forecast for a pick-up to 3.5 percent in a poll of economists.

Average weekly earnings excluding bonuses also rose by 3.4 percent on the year, in line with the poll forecast.

Britain’s strong labour market has defied a slowdown in the economy since the 2016 Brexit vote.

The number of people in work rose by 167,000 in the three months to December, stronger than the poll’s forecast of 140,000. It was the biggest increase since the first quarter of 2018.

With Britain due to leave the European Union in just over a month’s time, and still no clarity on whether it will have a transition deal to smooth the shock, many companies have cut investment in equipment, potentially making them more likely to hire workers.

The Bank of England has said it will need to raise interest rates gradually to offset inflation pressures from rising pay.

Brexit Secretary Stephen Barclay said he would hold more talks with EU chief negotiator Michel Barnier at mid-week after British Attorney General Geoffrey Cox sets out proposed amendments to the tricky Irish border backstop.

 “We had a positive meeting,” Barclay told reporters after he and Cox met with Barnier in Brussels yesterday.

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