Unemployment likely to keep wages down
Published On 15 November 2006
Anyone hoping for an inflation-busting pay rise in the near future might be disappointed after the latest government figures showed another increase in unemployment.The Office of National Statistics (ONS) said this morning that there were 1.7 million people out of work in the three months to September.
This modest increase of 0.1 per cent, coupled with the influx of foreign workers has helped take the heat out of wage inflation.
With many people in the UK still facing heavy debt repayments, many might have been hoping for a wage increase to help soften the blow.
While this is less likely, lower wage inflation should help avoid another interest rate rise, which means people in debt can at least expect their repayments to remain steady.
The cost of borrowing increased by 0.25 per cent last Thursday and now stands at a five-year high of five per cent.
