British pay growth has declined to its lowest level in nearly two years, with average weekly earnings rising by 5.4% year-on-year in the second quarter, down from 5.8% in May, as the Office for National Statistics reported. This slowdown in wage growth comes despite an unexpected drop in the unemployment rate from 4.4% to 4.2%, marking its lowest point since February.
The recent data has led to a strengthening of the pound and a slight decrease in the likelihood of a Bank of England interest rate cut in September. While wage pressures are easing, the central bank remains cautious due to ongoing concerns about persistent inflation in the economy