UK wage growth slowed to its lowest for more than two years as the rate of unemployment also surprisingly dropped, according to official figures.

The Office for National Statistics (ONS) revealed that regular wage growth was 5.4 per cent year on year over the three months to June.

However, this slipped from 5.7 per cent in the previous three months and represented the smallest increase since the period to July 2022.

The ONS also said the rate of unemployment was 4.2 per cent over the three months to June, dropping from 4.4 per cent over the previous three months.

A consensus of economists had predicted an increase for the quarter.

The Office for National Statistics (ONS) revealed that regular wage growth was 5.4 per cent year on year over the three months to June

Chancellor Rachel Reeves said: ‘Today’s figures show there is more to do in supporting people into employment because if you can work, you should work.

‘This will be part of my Budget later in the year where I will be making difficult decisions on spending, welfare and tax to fix the foundations of our economy so we can rebuild Britain and make every part of our country better off’. 

ONS director of economic statistics Liz McKeown said: ‘Basic pay growth, while remaining relatively strong, continues to slow.

‘Growth in total pay slowed markedly, with last year’s one-off NHS bonuses affecting the comparison.

‘The number of job vacancies continues to decline, although the total number remains above pre-pandemic levels.’