A slowdown in wage growth means the Bank of England will be able to begin cutting interest rates from May next year, economists predict.
Average total pay including bonuses stood at 7.9pc during the period, well ahead of inflation which stood at 6.7pc, according to the Office for National Statistics (ONS).
It means that pay grew in real terms by 1.4pc after taking inflation into account, rising at its fastest rate for two years.
However, wages have fallen from the fastest pace set in the three months ending in July, at a rate of 8.5pc.
Samuel Tombs at Pantheon Macroeconomics said the slowdown in wage growth would mean interest rates remain at 5.25pc and would pave the way for interest rate cuts from May.
He added rates would fall “probably by about 75 basis points over the course of 2024”.
Simon French, chief economist at Panmure Gordon, said the data “looks suspiciously like a soft landing”, meaning the economy is returning inflation to normal levels without a recession.
However, Ashley Webb, UK economist at Capital Economics, said: “Our view that wage growth will fall only slowly means that the Bank of England won’t be able to cut interest rates until late next year.
“But when interest rates are eventually cut, we think they will be reduced further than most expect.”
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2023-11-14 10:07:00Z
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