LONDON • Pay for workers in Britain picked up in the fourth quarter (4Q) and productivity gained as fewer jobs were filled by foreign nationals in the last year.
Average weekly earnings excluding bonuses rose 2.5% from a year earlier, the most since December 2016, the Office for National Statistics (ONS) said yesterday. The overall employment rate rose to 75.2%, close to a record.
The figures may be welcomed by those supporting the UK leaving the European Union (EU) who had complained that open immigration undermined locals. They may also fuel speculation that the Bank of England (BoE) could raise interest rates again as early as May after policymakers said the Brexit vote had lowered the pace the economy can grow without fanning inflation.
“Rising employment this past year was largely driven by UK nationals” as fewer eastern Europeans and non-EU nationals were working than a year earlier, ONS statistician Matt Hughes said. “These figures simply look at the number of people in work and aren’t a measure of migration.”
UK pay growth is still slower than inflation, which is running at 3%. The unemployment rate also rose to 4.4% as fewer workers were economically inactive. Private-sector pay gains accelerated to 2.6% from 2.5%.
BoE policymakers estimate there is little slack left in the economy, with surveys suggesting recruitment difficulties are forcing some firms to raise wages. Central-bank forecasts show unemployment averaging 4.2% in the coming quarters.