UK wages rise at fastest pace since 2008 in tight market

By BLOOMBERG

LONDON • UK labour-market figures yesterday painted a picture of an economy operating at or close to full capacity amid record employment.

Basic wage growth accelerated to a near 10-year high between August and October, and unemployment was just shy of its lowest rate since 1975, the Office for National Statistics said.

In normal circumstances, the Bank of England could be expected to respond by raising interest rates to combat the threat of inflation. But with fears escalating that Britain could crash out of the European Union without a deal and the economy losing momentum, traders now put the chance of a hike by the end of 2019 at less than 60%.

Average earnings excluding bonuses were 3.3% higher in the three months through October than a year earlier. That’s the fastest since the end of 2008. Economists expect a further acceleration as labour shortages force employers to raise pay rates to recruit and retain staff.

Unemployment rose 20,000 as economic activity fell, leaving the jobless rate at 4.%.