There has been a surge in the pace of wage growth but a rise in the unemployment rate, according to the latest official figures.
The Office for National Statistics (ONS) reported that both basic pay excluding bonuses, and average weekly earnings, rose at an annual rate of 5.6% in the three months to November.
That was up from a rate of 5.2% reported the previous month.
The ONS said the unemployment rate rose to 4.4% from 4.3%.
Money latest: Pound gets boost after Trump omission
The employment figures were the first to take in possible early reaction to the budget, and may suggest some employers were eager to retain staff through pay awards while others sought to cut costs.
HMRC payroll data and ONS survey data both pointed to lower employment.
They were released against a backdrop of recent financial market turmoil, partly linked to concerns over the state of the UK economy but mainly the potential impact of a fresh Donald Trump presidency.
Sterling has lost 12 cents versus the dollar since September while government borrowing costs have risen generally, placing a big strain on Chancellor Rachel Reeves’ spending rules.
Last Friday, following data showing weak retail sales during the crucial Christmas month, sterling fell again but on the back of growing expectations that the growing evidence of an economic slowdown would give the Bank of England more room to cut interest rates.
Some market commentators, and even the Bank’s newest rate-setter, believe borrowing costs will be cut four times this year though the market has currently only fully priced in two reductions.
Investors currently see an 83% probability of a Bank rate cut at the next meeting on 6 February, from 4.75% to 4.5%.
The last set of inflation figures, which showed a surprise easing in the headline figure, will have given the Bank some encouragement but economists see a rate back above 3% by April given expected increases in many costs, including energy and water bills, from that month.
While the budget tax measures on business sparked warnings of rising prices to offset billions of extra costs, it could also be the case that threatened hits to wages and jobs will help Bank policymakers make the case for rate cuts.
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