UK pay is rising, but Bank of England is still expected to cut interest rates

Outlook for employment looks weak enough to convince even hawkish policymakers to lower rates

• UK pay growth slows as inflation pressure weakens

UK private sector wages rose in November by almost double the pre-pandemic rate – 6.5% compared with 3.8% – and yet the Bank of England is expected to consider the outlook for employment to be weak enough in the coming months to justify interest rate cuts.

The Bank’s monetary policy committee (MPC) meets next month to judge the health of the economy and whether interest rates at 5.25% are too much of a dead weight on households and companies.