FX.co ★ UK unemployment at lowest level, wages decline

The UK wage growth is below inflation, despite unemployment hitting the lowest rate since 1975. According to some economists, the low wage growth rate will not affect the Bank of England’s decision to raise interest rates in May 2018.

After wages rose by 2.8% over the past three months, the pound sterling has depreciated. The inflation rate for three months was about 2.9%. According to the Office for National Statistics (ONS), Britain’s unemployment rate unexpectedly declined to 4.2%, which was the lowest in more than 40 years.

Earlier, the Bank of England said it expected acceleration of the wage growth due to a decline in the unemployment rate. According to the regulator, if this happens, it will be possible to raise interest rates.