Interest rate cut hopes raised by slowing wage growth

Yael Selfin, chief economist at KPMG UK, said the latest figures on wages plus slowing economic growth meant she expected the Bank of England to cut rates next month.

The latest figures from the the Office for National Statistics (ONS) also showed the unemployment rate fell to 4%.

The ONS has urged caution with its unemployment figures due to problems with the survey data it collects.

However, it says that an alternative measure shows a flattening off of the number of employees on payrolls in recent months.

Employers are continuing to grapple with higher costs, and reports have suggested they are wary of making any big moves ahead of hearing more about the chancellor’s tax plans in the Budget on 30 October.

The ONS said the rate of people considered “economically inactive” – defined as those aged between 16 to 64 years old not in work or looking for a job – edged lower to 21.8%.

The number of job vacancies also decreased, falling to 841,000 in the July to September period.

“Vacancies have fallen once more, with most industries seeing a fall on the quarter,” said David Freeman of the ONS.

“However, the total still remains a little above its pre-pandemic level.”