UK regular pay growth slows to 6.1 from 6.2
Jobless rate rises to 3.9 from 11month low
Sterling weakens as markets eye BoE rate cuts
Job vacancies fall further, down 200,000 on year
CPIadjusted pay rises at fastest since Sept 2021

LONDON, March 12 Reuters British wages excluding bonuses grew at their slowest pace since October 2022 while the unemployment rate edged up unexpectedly, according to data which may slightly ease the Bank of England39;s inflation worries.

Regular wage growth dropped to 6.1 in the three months to January from 6.2 in the final quarter of 2023, the Office for National Statistics said. Economists had expected another reading of 6.2.

However, falling inflation means that in real terms, pay was up by 2.0 compared with a year earlier, the fastest growth since September 2021.

Sterling weakened against the U.S. dollar and euro immediately after the data was published, and markets slightly increased bets on a BoE rate cut in June, although one is not fully priced until August.

The BoE is watching wage growth to gauge underlying inflation pressures as it considers when to cut interest rates.

Today39;s data are unlikely to warrant a major policy shift from the Bank of England, particularly with pay growth still robust and continued worries it could lead to a persistence in price pressures, Yael Selfin, chief economist at KPMG UK, said.

However, we expect the labour market to weaken in the coming months, which should reduce momentum in wage…