UK wage growth eases to 5.8%

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UK wage growth eased by less than expected in the three months to December, according to official data that will leave the Bank of England still looking for confirmation that inflation is on the way down.

The annual pace of growth in average weekly earnings, including bonuses, slowed to 5.8 per cent in the three-month period, the Office for National Statistics said on Tuesday. That was down from a summer peak of 8.5 per cent and from 6.7 per cent in the three months to November.

Annual growth in earnings excluding bonuses slowed to 6.2 per cent, compared with 6.7 per cent in the three months to November.

The rate of earnings growth slowed less than analysts or the central bank had predicted.

UK rate-setters are watching wages closely because they believe it will be harder to return inflation to target if pay rises rapidly and companies prove able to pass higher labour costs on to consumers. In December, inflation stood at 4 per cent.