While public sector pay awards granted by the government will feed through to official figures over the rest of the year, economists have warned the forthcoming rise in employers’ NICs could squeeze those in the private sector.
Rob Wood, chief UK economist at Pantheon Macroeconomics, said that the Bank of England would focus on big trends rather than “small data misses” by the ONS.
“Unemployment is likely gradually rising, the labour market is loosening but it remains tight,” he said. “Similarly, wage growth is gradually slowing but remains too high still to deliver inflation sustainably at target.”
Other economists have said they do not believe the latest figures from the ONS would spur the Bank to opt for another rate cut in December.
Work and Pensions Secretary Liz Kendall said that “more needs to be done to improve living standards”.
The Labour MP said that from April, three million of the lowest-paid workers would benefit from an increase to the minimum wage, known officially as the National Living Wage.