With UK wage growth remaining stubbornly high, the focus is now on the Bank of England’s December meeting, where the policymakers are likely to exercise caution and hold rates steady. The latest ONS labour market data shows wage growth proving more resilient than anticipated, presenting an additional challenge for the central bank’s monetary policy stance. In the previous quarter, regular pay growth, excluding bonuses, eased only marginally to 4.8%, however more concerning was the increase in total pay growth, including bonuses, which rose considerably above expectations to 4.3%.

This sharp increase was driven by the one-off payments made to public sector workers, although close attention will be paid to next quarter's figures, which will capture any initial impact following the budget. Therefore, the MPC’s next rate decision will be crucial in determining whether the bank views this current elevated wage growth as a temporary anomaly or a more enduring threat to its inflation target, impacting monetary policy going into 2025.