Bank of England expected to leave interest rates on hold as oil and gas prices surge; UK pay growth hits five-year low– business live

Rolling coverage of the latest economic and financial news

• UK wage growth slows sharply as unemployment holds steady

• Fed holds interest rates steady as Iran war drives up oil prices and inflation fears

• Middle East crisis live: Trump threatens to ‘blow up’ entire South Pars gasfield if Iran strikes Qatar

UK wage growth was particularly weak once you account for inflation.

Real regular pay (adjusted by the consumer prices index) fell to just 0.5% in November-January. That’s the lowest since May to July 2023.

“With unemployment staying steady at 5.2% and a rare gain in payrolls employment, this report paints a mildly more positive picture of the labour market. And with wage growth softer again, in normal times this would have been a relatively reassuring report for the Bank of England.

But the report feels stale in light of the Iran conflict, and the inflation risks stemming from the large spike in energy prices. So while today’s Bank of England meeting had once looked like the likely point of the next rate cut, instead policy is set to be kept on hold today as policymakers give themselves more time to see how the conflict plays out.