Strong wage progress hits hopes of rate of interest lower – newest updates

Big pay rises for workers in March threaten to knock Andrew Bailey’s hopes for an interest rate cut next month, as higher wages risk sustaining inflationary pressures through the economy.

The average worker was paid 6.2pc more in March than they were a year earlier, according to the Office for National Statistics. 

When taking inflation into account, total pay rose by 2.1pc, which was the highest since the three months to September 2021.

March is a critical month for annual pay reviews, so the rise in regular pay packets will be of concern to the Bank of England Governor as he considers whether inflationary pressures are sufficiently under control to allow him to cut rates from the current level of 5.25pc.

Unemployment rose to 1.49m in the three months to March, up from 1.32m in the previous quarter. It takes the unemployment rate up to 4.3pc, its highest since last summer.

A total of 9.38m are economically inactive – of working age but neither in work nor looking for work – with 2.82m of those long-term sick.

The number of job vacancies available dipped again to just under 900,000 in the three months to April.

Read the latest updates below.