(by Dr. Goldfinger)

Average earning announced to have lifted more than expected within three months to August against the previous year data.

"The biggest surprise was the wage numbers, but there is considerable headroom between the current rate of average earnings and the Bank of England’s threshold, which is probably 4.5% and possibly 4.75%," said Richard Iley, economist at BNP Paribas in London.

On Wednesday, the Office for National Statistics announced average earnings to have risen 3.9% as compared with 2003 results.

"I don’t think this means a great deal for interest rates for this year or in November, but it keeps alive the possibility of a rise in early 2005 and the pay settlements made in January could be key from a rate raising perspective," said Ross Walker from RBS Financial Markets.
The ONS pointed the number of inactive people of working age lifted by 91,000 on the quarter to 7.93 million, which is the highest figure since 1984.
Average earnings without bonuses added 4.3% within the three months to August, and up from 4.2% in the three months to July.