British employers' expectations for wage growth have cooled a bit further, according to a survey published by the Bank of England which is watching closely for signs of a slowdown in pay rises as it considers when next to cut borrowing costs.
Expected year-ahead wage growth dropped by 0.1 percentage point to 4.0% on a three-month moving-average basis in November but remained close to its recent average, the Monthly Decision Maker Panel survey showed on Thursday.
It was the weakest reading since at least mid-2022, when comparable records started.
The survey showed 38% of firms expected to pay lower wages than they otherwise would have done because of an increase in social security contributions that was announced in the first budget of Britain's new government in October.
Almost 60% of firms expected to lower their profit margins while 54% expected to raise prices and the same proportion said they would lower employment in response to the increase which comes into effect in April.
The survey showed expectations for Britain's consumer price inflation in the year ahead rose to 2.7% in the three months to November from 2.6% in the three months to October.
BoE Governor Andrew Bailey reiterated on Wednesday that he expected the central bank would cut borrowing costs only gradually as there was "still a distance to travel" to get inflation fully under control.
