15 June 2005, 13:18  UK wage pressures ease in April

Wage pressures in the UK economy were less marked than anticipated in April, but unemployment rose well above expectations, largely as a result of the collapse of the Rover Group car manufacturer, official figures showed today. The office of National Statistics revealed that headline earnings, which include bonus payments, rose by 4.6 pct in the three months to April from the previous year.. The earnings data may ease concerns on the Bank of England's rate-setting Monetary Policy Committee that higher earnings may stoke up wider inflationary pressures in the economy. The MPC, which is tasked to keep CPI inflation at 2.0 pct on a two-year horizon, gets increasingly concerned when average earnings, excluding bonuses, rise by 4.5 pct or above. Unemployment rose above expectations, however. The claimant count measure increased by 13,200 in May from the previous month, taking the total up to 855,300. The figure is well above analysts' expectations for an increase of just 5,000. This was the fourth consecutive increase in the number claiming job-seekers allowance, and marks the longest spell of increases in the claimant count since December 1992, The claimant count rate was 2.7 pct, unchanged on the previous month. The wider ILO measure of unemployment showed unemployment in the three months to April fell 15,000 on the previous three months, taking the total to 1.40 mln, with the rate at 4.7 pct, unchanged on the previous period. A more detailed look at today's data shows that total employment in the economy increased, however, rising by 11,000 to 28.58 mln over the three months to April and by 196,000 over the year to reach 28.58 mln.

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