LONDON, Sept 12 Reuters Britain39;s labour market showed more signs of cooling in the three months to July despite another month of strong pay growth, according to data that leave the Bank of England on track for a further interest rate hike next month.

The unemployment rate rose to 4.3 in the three months to July from 4.2 a month earlier, its highest since the three months to September 2021, the Office for National Statistics ONS said.

The unemployment rate is already higher than the 4.1 the BoE had pencilled in for the third quarter as a whole, when it published its last set of forecasts in early August.

Employment dropped by a greaterthanexpected 207,000 in the three months to July, the biggest such fall since the three months to October 2020, the data showed.

Wages continued to rise quickly, and above the rate of inflation something which most investors think will prompt the BoE to raise interest rates again on Sept. 22, although perhaps for the last time in the current cycle.

British wages excluding bonuses were 7.8 higher than a year earlier in the three months to July the jointfastest rate since ONS records began in 2001 and in line with economists39; forecasts in a Reuters poll.

Pay growth including bonuses rose by more than expected, up 8.5 compared with the 8.2 consensus for the three months to July. Adjusting for consumer price inflation, it marked a 0.6 gain the first since March 2022.

Wage growth remains high, partly reflecting oneoff payments to…