Average earnings growth picked up less than expected in the three months to December although the underlying rate hit its highest in nearly three years, official data showed yesterday.
However, gradually rising pay may suggest to some that the Bank of England will nudge interest rates higher later this year.
National Statistics said annual average earnings growth rose to 4.3 per cent in the three months to December, up from 4.2 per cent in the prior period although less than the 4.4 per cent economists had expected.
Excluding bonuses, annual average pay growth rose to 4.5 per cent from 4.4 per cent, the fastest rate since January 2002 and at the threshold the BoE has previously said is consistent with stable inflation.
David Page, economist at Investec, London, said the figures were unlikely to influence policymakers' thinking on the future direction of interest rates.
"They have crept up ever so slightly but I don't think it will worry the Bank," he said.
However, Marc Ostwald, strategist at Monument Securities, said while no immediate market impact could be expected, "it is enough to underline that the BoE will be more hawkish on rates".
The NS said that the rise in underlying earnings was mainly due to overtime in the property business and renting sector.
An official for NS said the picture of how much in bonuses are being paid this year is not yet clear. At the moment it looks like firms are paying slightly less in bonuses than they were last year, but some of the larger bonuspayers appear to be paying out bigger bonuses this year.
Wage growth in the public sector was 4.7 per cent, unchanged from the previous month, compared with 4.3 per cent in private firms.
Annual average earnings in manufacturing accelerated to
3.4 per cent in the three months to December, the latest period for which data are available, from 3.1 per cent.
