UK wage growth expectations hold at joint-lowest in four years

British employers’ expectations for wage growth held at their ​joint-lowest in nearly four years in February, according ‌to a survey published by the Bank of England, which is looking out for further signs of a slowdown in ​pay pressure before it next cuts interest rates.

Expected ​year-ahead wage growth remained at 3.6 per cent on a ⁠three-month moving-average basis in February, the joint-lowest reading ​since the series started in 2022, the monthly Decision ​Maker Panel survey showed this week.

Companies’ expectations for how much they would raise their own prices in the coming 12 months ​inched down, falling by 0.1 percentage points to 3.4 per cent ​in the three months to February.

Companies also said they expected to ‌expand ⁠staffing levels by 0.1 per cent over the coming year.

The central bank is closely monitoring wage growth as it tries to gauge how much inflation pressure remains in ​the economy and ​is expected ⁠to keep interest rates at 3.75 per cent this month after holding them in February.

Investors trimmed ​their bets on interest rate cuts by ​the ⁠Bank of England this week and are only pricing in one quarter-point cut this year as the US-Israeli ⁠war ​on Iran continued to stoke fears ​about inflation.

The BoE survey was conducted before the most recent Middle East ​conflict started.