U.K. workers’ inflation-adjusted wages fell for the sixth consecutive month in August despite a tight domestic job market, new figures showed Wednesday, highlighting a continued living-standards squeeze that has been evident since last year’s Brexit vote.
The U.K. Office for National Statistics said the jobless rate remained at 4.3% in the three months through August–the lowest level in more than 40 years.
Notably, the unemployment rate among women stayed at an all-time low of 4.2%, pointing to a lack of slack in the job market. Yet the high demand for labor failed to translate into significantly increased pay packets, the data showed.
Average annual wage growth slowed to 2.1% in the same period, down from the revised figure of 2.2% in the three months through July.
This meant that Britons’ wages fell by 0.4% when adjusted for inflation, in a worrying sign for the country’s largely domestic-driven economy.
British economic growth slowed visibly this year as complex Brexit negotiations soured consumer confidence and accelerating inflation–fueled by the pound’s collapse in the wake of the Brexit vote last year–hit household spending.
Consumer prices rose in September at their fastest annual rate for more than five years, registering the eighth consecutive month of above-target inflation.
Most economists expect the Bank of England to raise its benchmark interest rate from 0.25% to 0.5% in November and officials have repeatedly signaled that borrowing costs will need to rise soon.
A quarter-point rise would mark the first time the central bank has increased interest rates in a decade. Officials led by BoE Governor Mark Carney say they expect future rate increases to be limited and gradual.
Wednesday’s data offered some tentative signs that labor market tightness may not last. The number of people in employment fell slightly in the June to August period, while the number of those who said they’d stopped looking for work rose.
Source: Dow Jones