By Paul Hannon
U.K. businesses expect wages to rise at a slower pace over the coming 12 months, a finding that will help reassure policy makers at the Bank of England that inflation has been tamed.
A survey of 2,422 businesses carried out by the BOE during March found that the average expected rise in wages eased to 4.9% from 5.2% in February. Those businesses reported that wages were 6.4% higher in the three months through March than in the same period a year earlier.
Policy makers have highlighted the strength of recent wage growth as a key concern as they prepare to lower borrowing costs later this year.
While the U.K.'s annual rate of consumer-price inflation is expected to hit the BOE's target of 2% during this quarter, that is largely due to a decline in home energy prices. Policy makers worry that after energy prices stabilize, rapidly rising wages could lead to a fresh pickup in inflation.
Write to Paul Hannon at paul.hannon@wsj.com
(END) Dow Jones Newswires
04-04-24 0455ET
