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UK wage growth slows

British workers’ wages grew more slowly in the three months to April, according to official data published this morning which could further dampen expectations that the Bank of England will raise interest rates as soon as August.

Total earnings, including bonuses, rose by an annual 2.5 percent, down from growth of 2.6 percent in the three months to March.

Excluding bonuses, earnings also showed slower growth, rising 2.8 percent year-on-year against expectations of 2.9 percent.

In the month of April alone – which is often when companies give staff their annual pay rise – total pay and regular pay rose by 2.5 percent, the ONS said.

The BoE says it expects wage growth to pick up speed gradually over the next three years, a big reason why it has said it is likely to raise interest rates over the period.

Data due tomorrow is expected to show Britain’s consumer price inflation edged back up to 2.5 percent in May but remains well below a five-year peak of 3.1 percent set in November.

The BoE said in May that it expected pay growth of 2.75 percent a year by the end of 2018, rising to 3.5 percent by the end of 2020.

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