This article discusses the United Kingdom’s unexpected decrease in unemployment rates to 4% in the three month period leading up to August, down from 4.1%. The West Midlands, specifically, witnessed a drop from 4.7 to 4.1 per cent from May to August. The article emphasizes a slowdown in wage growth, now at its lowest in over two years, strengthening hopes that interest rates will be reduced in the upcoming months.

The data indicates that average regular earnings growth retreated to 4.9% in the three months to July, down from 5.1% in the preceding three months, marking the lowest level since the three months to June 2022, according to the Office for National Statistics (ONS). The slowed wage growth is perceived to support theories that the Bank of England will once again cut rates in November, possibly from 5% to 4.75%.

Despite striking a historical high of around 8% in summer 2023, pay growth saw a sharp decrease, but still surpasses the inflation rate, growing by 2.6% in the three months to August considering the Consumer Prices Index (CPI). Rob Wood, chief UK economist at Pantheon Macroeconomics, expressed certainty that the wage slowdown would result in a November rate cut.

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