19.10.201703:18:00UTC+00UK Wage Growth Drops as Unemployment Rate at 42-Year Low

UK wage growth eased marginally in the three months to August, which is comfortably below the rate of inflation, despite the unemployment rate holding still at its lowest level since 1975.

According to the Office for National Statistics, average hourly earnings of British workers, excluding bonuses, rose 2.1 percent year-over-year over the period, lower from a slightly upwardly revised 2.2 percent in the three months until July.

Real earnings, which are adjusted for inflation, declined at a year-on-year pace of 0.4 percent. There was slightly stronger growth for workers in the private sector, the ONS said.

The latest figures follows after separate data released this week showed that consumer prices increased at an annual pace of three percent in September, propelled by the post-Brexit decline in the pound. Higher inflation along with weaker wage growth has added pressure on the spending ability of consumers.

Britain's unemployment rate between June and August held at a 42-year low of 4.3 percent, which is lower than the 4.5 percent from March to May. Compared with the May – July period, it was stable.

The jobless rate has not been so low in 42 years, the ONS said.

The number of people in work increased by 94,000 in the three months to August, compared with three months ago.

The Bank of England expects pay growth to accelerate soon because the jobless rate is below the 4.5 percent level it sees as a trigger for inflation pressure in the economy. It also thinks Brexit will raise price growth in Britain.