Wage growth in the UK has seen a slight uptick, with average weekly earnings rising by 5.9% from December to February despite a weakening labor market. Unemployment remains steady at 4.4%, but job vacancies have continued to decline, suggesting underlying slack. A notable drop of 78,000 payrolled employees in March indicates pressure on hiring amidst high interest rates. The strong pay growth is concerning for the Bank of England, as it is above the desired inflation target, especially with recent policy changes that may dampen hiring in low-wage sectors.
Regular pay growth remains strong, having increased slightly in the latest period. Growth accelerated in the public sector as previous pay awards fed through to the data.
Despite the strong pay growth, the number of payrolled employees declined by 78,000, highlighting mounting pressure on hiring as businesses adapt to a slowing economy.
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