Private sector pay boosts UK wage growth
Published On Jan 21, 2025, 2:11 AM
Wage growth in the UK has been boosted by significant pay rises in the private sector, with average regular pay increasing by 5.6% from September to November year-on-year. Private sector wages saw a stronger rise of 6% compared to 4.1% in the public sector. Despite concerns that these wage increases could lead to higher inflation, the Bank of England is still anticipated to cut interest rates next month.
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The rise in private sector wages typically indicates a strong labor market, which can lead to increased consumer spending. However, there are concerns about inflation spikes, which could affect economic stability and monetary policy. Interest rate cuts may temporarily boost the economy but could also lead to inflation concerns if wage growth continues. Stocks or ETFs with exposure to UK markets or consumer sectors may benefit from increased spending but should be watched closely for inflation impacts.
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