The UK annual wage growth excluding bonuses has accelerated to 2.8% in February, the National Statistics Office reported. The consumer price inflation averaged to 2.9%, and is expected to slow to 2% in the year.
The data may spur speculation that the British Central Bank will raise interest rates again next month, although the economy did not perform well in the first quarter mainly due to bad weather in the country.
The experts fears that domestic inflationary pressures are booming, as labor shortages make firms compete for their job vacancies. The employment has risen to record highs between December and February, with 55,000 jobs created in the economy. Thus, unemployment is down to 4.2% – the lowest level since 1975, which is under the auspices of the Bank of England.
The return of real income growth is good news for households, as wage growth has lagged behind inflation for more than an year.
Against this background, however, the GDP data shows that the UK remains at the bottom of the G7 growth countries, making it the slowest growing economy in the world in 2017. The growth of 1.4% is weaker from that of Japan and Italy – the other most slowly expanding developed countries.
The expectations that the country will see the slowest growth among major economies this year remain the same, says the Organization for Economic Cooperation and Development (OECD). The organization raised its growth forecast for the United Kingdom’s economy to 1.3% in 2018, with a rising global recovery from the earlier 1.2% widening forecast. However, growth remains the weakest among the G20 countries.